Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

NEW WRIT

For Newcastle-under-Lyme, in the room of John Golding Esq. (Chiltern Hundreds).—[Mr. Foster.]

PRIVATE BUSINESS

BLYTH HARBOUR BILL [Lords] (By Order)

Order for Second Reading read.

To be read a Second time tomorrow.

Oral Answers to Questions — ENVIRONMENT

House Building (Brent)

Mr. Pavitt: asked the Secretary of State for the Environment if he will publish in the Official Report a table showing the number of house building starts, both private and public, in the London borough of Brent during 1985; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The London borough of Brent reported 455 starts during 1985, the highest number since 1977. Of these, 188 were private sector and 267 public sector.

Mr. Pavitt: Is the Minister seized of the depth of the crisis in Brent, where only six local authority houses were built last year and where 18,000 people are on the waiting list? Is he aware that there are 650 homeless families? Does he realise that at least 4,916 families are on the high priority transfer list from high rise blocks? Every Saturday morning I am torn to pieces by the family and human tragedies of people who cannot face the problem of not having a roof over their heads.

Sir George Young: I am not sure that the hon. Gentleman heard my reply. Starts last year were the highest since 1977. There were 455 starts in 1985, as against 111 in 1979.
The hon. Gentleman was right to say that there are some 600 families living in unattractive circumstances in bed-and-breakfast accommodation, but there are 825 empty dwellings in Brent's ownership, of which 319 have been vacant for more than one year and 180 for more than two years. Brent should bring those properties back into use.

Mr. Lyell: Is there any arrangement whereby some of those seeking homes could move into the 1,500 houses that have been vacant in Southwark for more than a year?

Sir George Young: Brent is entitled to nominate people, through the London area mobility scheme. Last year it had a quota of 568 lettings, but took only 263 of them. There is an opportunity for Brent to attack its housing problem by making fuller use of London's mobility scheme.

House Prices

Mr. Simon Hughes: asked the Secretary of State for the Environment what has been the percentage increase in average house prices in (a) Greater London and (b) the south-east of England in each of the three last years for which figures are available.

The Minister for Housing, Urban Affairs and Construction (Mr. John Patten): The rises in house prices in Greater London are estimated to have been 12 per cent. from 1982 to 1983, then 16 per cent. to 1984 and 14 per cent. to 1985. For the rest of the south-east, the estimates are 13 per cent., 13 per cent,. and 10 per cent.

Mr. Hughes: Does the Minister realise that those figures compare with increases in average wages that are considerably below those levels— about 9 per cent., 7 per cent. and 8 per cent. for the same three years in Greater London? Does not that, coupled with unemployment that now puts 14 London constituencies in the top 50 for rising unemployment, mean that very few people can buy first homes in London? What will he do about it, and how soon will he provide the opportunity to purchase for those at the bottom end of the earnings scale or those who are not employed at all?

Mr. Patten: First, I invite the hon. Gentleman to join me in putting the maximum possible pressure on the boroughs involved to ensure not only that all the derelict land that they have is brought forward for housing but that they do not in any circumstances delay the planning process, which is one of the things that prevents proper new building taking place. I listened to what the hon. Gentleman said about the need to bring about more low-cost housing development. That is why we intend to do all that we possibly can to encourage shared ownership in the capital and the south-east.

Mr. Jessel: Do not current house prices in the south-east make the £30,000 limit on mortgages for tax relief somewhat out of date?

Mr. Patten: Not at the moment.

Mr. Winnick: Does the Minister recognise that his answer means that his Department should do what it can to encourage local authorities to build so that many people who are not in a position to buy are able to be rehoused by local authorities? Even if we take into consideration the number of empty properties — some of which are not being done up because of lack of cash—there remain hundreds of thousands who stand no chance of buying their own homes and who are in desperate need of local authority accommodation. Does the Minister associate himself with the insulting and offensive remarks that were made last week by the Minister for Information Technology? Are those his views?

Mr. Patten: I shall answer the hon. Gentleman's first question. The answer is very much in the hands of local authorities. The message of "build, build, build," helped throughout the 1960s and 1970s to bring about the problems that we have today. Build in haste, repair at


leisure. There has been under-investment in housing repair. That is why we have so many empty houses in council ownership and why we have homelessness.

Green Belt

Mr. Robert B. Jones: asked the Secretary of State for the Environment whether he intends to make any changes to the Government's policies on the green belt.

The Secretary of State for the Environment (Mr. Nicholas Ridley): No, Sir. The policy on development in the green belt remains as set out in my Department's circular 14/84.

Mr. Jones: I am grateful to my right hon. Friend for his defence of the green belt. Can he confirm that where the local planning authority, the borough or district council, is opposed to the release of land from the green belt, such as in my own constituency, he will reinforce the stance of the council and not seek to release land against its wishes?

Mr. Ridley: We must take into account the structure plans. Together with the green belt policy and the nature of any structure plans that are in existence, my role is to make an interpretation if appeals come to me.

Mr. Colvin: My hon. Friend the Member for Hertfordshire, West (Mr. Jones) is lucky to know where his green belt is. My constituents and the planners who look after their interests have been waiting for months for the publication of the South Hampshire structure plan. Can my right hon. Friend give me any idea when that plan is likely to see the light of day?

Mr. Ridley: Shortly.

Water Authorities (Privatisation)

Sir Geoffrey Finsberg: asked the Secretary of State for the Environment if he is now in a position to state when he plans the conversion of the Thames water authority into a water supply public limited company; and if he will make a statement.

Mr. Sims: asked the Secretary of State for the Environment what progress he has made with plans to privatise the water authorities.

Mr. Ridley: The Government intend to introduce legislation to restructure the 10 water authorities in England and Wales as water service public limited companies. They will then be floated when market conditions and the circumstances of the individual companies allow.

Sir Geoffrey Finsberg: I thank my right hon. Friend for that reply. Will he use the intervening period to make it crystal clear that the 25 per cent. of the population who already get their water from private companies are not suffering deprivation, sewerage trouble, high prices, and all the other nonsense that is put about by the Opposition parties and the trade unions?

Mr. Ridley: I agree entirely with my hon. Friend. He is right to draw attention to the position of the 28 statutory water companies, which supply about one quarter of the water in England and Wales, including large cities such as Newcastle and Bristol. The companies operate to the same tight legislative requirements as the water authorities on the purity of drinking water, and so on. They have an excellent record in maintaining standards of all kinds.

Mr. Sims: Is my right hon. Friend aware that the Thames water authority is ready, willing and, indeed, eager to become a public limited company and to do so on terms that will be favourable for both employees and customers? Can he confirm that the legislation that he will introduce will enable Thames to be privatised as soon as it wishes without necessarily having to wait until the other nine authorities are ready to go forward?

Mr. Ridley: I agree with what my hon. Friend says about the Thames water authority. It is encouraging that there is competition from a number of water authorities to be first into the private sector. There is a reluctance also, I think, to be last into it. The order in which it will be right for the authorities to go into the private sector will depend on the state of readiness at the time.

Mr. Spearing: Does the Secretary of State agree that the policy involves selling off the ownership and control of the River Thames from Teddington to Cirencester and Tewkesbury? Does he recall that in the debate on Monday his hon. Friend the Minister for Housing, Urban Affairs and Construction confirmed that the Government would welcome private overseas capital in a shareholding of that river? Will the right hon. Gentleman tell the House the maximum proportion that he envisages will be permitted to private capital? Is not the idea of the sale of the River Thames or any other river in the country to private ownership entirely against the views of the majority of people of this country?

Mr. Ridley: I must correct the hon. Gentleman, in that Tewkesbury is in the Severn catchment area, although Cirencester is in the Thames catchment area. I must correct him also in another, more important, respect. I see no objection whatsoever to the import of capital into this country. Many of our industries rely on imported capital and many of our jobs rely on capital which we have exported overseas. I do not take the narrow, blinkered attitude that the hon. Gentleman takes to the free flow of capital in world markets.

Mr. Allan Roberts: Has not the Secretary of State just confirmed that the French could actually buy the North-West water authority and the Thames water authority, and that the British people could buy not only their energy but their water from the French? Does he really believe that the British people want that? Will he confirm that the so-called private water authorities are merely franchising companies which sell water which they get from the existing publicly owned water authorities and that not one of them is responsible for pollution or sewerage matters, in which there is no profit? If the water authorities are privatised, will the country not suffer as a result?

Mr. Ridley: The hon. Gentleman knows that in many privatisations the Government have thought it appropriate to take a golden share to control the degree of foreign ownership. When the House considers the matter, we can discuss the pros and cons of such a policy on water. It is not something that can be taken away. It is not possible to close down the North-West water authority. I feel that the problem is nothing like as important as the Opposition seem to be majoring on.
It is true that private water companies do not perform the entire functions of the water cycle, but the functions that they do perform—I think the hon. Gentleman will accept this—are of a first-class standard.

Mr. Steen: Will my right hon. Friend have a word with his right hon. Friend the Secretary of State for Transport and ensure that he knows what will happen to the chairman of British Rail if he does not change his mind about the sale of French water on all British Rail trains? It is impossible to get English water on British Rail trains, except for cleaning one's teeth on the night train, which the chairman of British Rail said that it is the only thing that it is good for.

Mr. Ridley: My hon. Friend invites me to talk to my former self, which is a temptation I must now resist. I suggest that it might be advantageous if we could get Malvern water on SNCF.

Mr. O'Brien: In view of the right hon. Gentleman's reply to the question about the speed with which some water authorities will be privatised, will be tell the House how charges will he levied on domestic consumers when the water authorities are in the private sector? If there is to be a delay in metering or initiating other services, will he agree to the private sector using the rating system to collect charges from domestic consumers?

Mr. Ridley: The private sector has been charging customers for water for centuries in those areas where water is still under private control. There have been remarkably few complaints or questions asked about that practice. I do not see why that should not continue.

Dr. Cunningham: First, I take this opportunity to congratulate the right hon. Gentleman on his appointment to his important office. We are aware that behind his well-known eccentricities of view lies a fairly shrewed political brain. As he has referred to his tendency to talk to himself, I should advise him that many people in local government fervently hope that he will go on doing that, and leave them alone.
As for the right hon. Gentleman's proposals to privatise Britain's water resources, I remind him that even his own eccentricities cannot cover the fact that the Government are proposing to hand over water consumers to private enterprise monopolies without competition or choice. A rip-off of the taxpayers' assets is likely to be followed by a rip-off of water consumers. How can the right hon. Gentleman, of all people, possibly justify that?

Mr. Ridley: I am grateful to the hon. Gentleman for his welcome to my sitting in this position. I can reciprocate by saying how pleased I am to find him sitting in his position, on the Opposition. and I hope that he will remain there for a very long time.
I am fascinated that in my new post I am to have the label "eccentric". I am used to having labels of one sort or another, so I say in gratitude to the hon. Gentleman that this one is much more acceptable than some I have had.
The hon. Gentleman has left out of account the fact that many companies have performed infinitely better in the private sector. I can compare this with British Telecom, where privatisation of what was nearly a natural monopoly has taken place. One cannot meet anyone who does not now remark how greatly improved telephone services are.

Local Authority Housing

Mr. Cartwright: asked the Secretary of State for the Environment when he next plans to meet representatives of the local authority associations to discuss ways of

reducing the backlog of repair work identified in his Department's inquiry into the condition of the local authority housing stock in England.

Mr. Ridley: I will be meeting representatives of the local authority associations to discuss various housing issues at the Housing Consultative Council meeting on 8 July.

Mr. Cartwright: Does the Secretary of State accept the Audit Commission's estimate that about £900 million is added each year to the council house repair bill? Does that not mean that, at the present rate of investment, it will take us about 90 years to bring all council housing up to an acceptable standard?
In view of the seriousness of the problem, what steps is the right hon. Gentleman taking to ensure that local authorities display greater interest in co-operating with the private sector in the repair and rehabilitation of council estates?

Mr. Ridley: I have barely received, let alone had time to study, the report. If that proves to be the case, it must be said that local authorities have for many years failed to keep their housing stock in good order.
It is extraordinary that, after decades of managing local authority housing, local councils have now come along with a capital problem, which appears to be great, because of their neglect to keep rents at a level which would enable them to keep their houses in good order. Further evidence of that is the fact that spending per house on repair and maintenance and on capital improvements was abysmally low when we came to power. Since 1980–81 spending per house has gone up by 21·5 per cent. in real terms. We now have figures of £2·5 billion a year on maintenance. £1·2 billion on capital and £1·4 billion on revenue expenditure, which are far better figures than when we first came to power. It is that which has gone wrong in the past. Not enough has been spent to maintain the houses, and that is why we have such a bad situation of disrepair.

Mr. Heddle: Is it not a national scandal that so many local authorities are keeping many council houses empty for so long? Is not their negligence contributing to the misery of homelessness? Does my right hon. Friend agree that one solution to the problem is to allow do-it-yourself experts who are waiting for council houses to take over those council houses for a rent-free period and do them up at their own expense, because the local authority would have left them empty in any event?

Mr. Ridley: I agree with my hon. Friend. He has made a sound point. The fundamental problem is that those houses have been allowed to exist without being repaired and the local authorities have not had sufficient revenue to do so. Whether the repairs are done by allowing the tenant to do it at his own expense, or whether the tenant pays more so that the local authority can do it, is a secondary issue. The point is that it should never have been allowed to happen in the first place.

Mr. Michie: As the Government's own estimates of the backlog of repairs or cost is about £19 billion, how can the Government justify further constraint on money for repairs by local authorities?

Mr. Ridley: I take seriously the appalling situation of disrepair in local authority houses. That is something I shall he looking at to see how we can best deal with it. I should have thought that the whole House would agree


that we should not allow further disrepair. We should avoid the mistakes of the past in failing to maintain houses as we go along out of the housing revenue accounts.

Mr. Yeo: Will my right hon. Friend consider allowing local authorities to use a greater proportion of their capital receipts, perhaps returning to the 40 per cent. level which was the figure until the beginning of last year, as a means of addressing this problem?

Mr. Ridley: That is something that I am busy studying at the moment. The areas where the main disrepair has been allowed to grow tend to be in large municipal housing estates where there are small accumulated receipts. Areas where there are large accumulated receipts tend to be where the local authority has kept its housing in a much better state of repair. There is a serious mismatch between resources and needs.

Mr. Raynsford: Does the Secretary of State accept the need for substantial additional resources to be made available to those inner city authorities which have the greatest concentrations of problems? Will he possibly even consider using those capital receipts, which are available elsewhere, to help those authorities with the greatest need?

Mr. Ridley: My hon. Friends will be delighted to hear that the Labour party thinks that the prudent housekeeping of many Tory district councils, which has resulted in accumulated receipts, should be forcibly taken away from them and given to spendthrift authorities which fail to keep their housing in good order.

Mr. Hickmet: Does my right hon. Friend accept that those local authorities which have gone out to private contractors to have the housing stock maintained have spent their money more effeciently and cost-effectively? Is it not a fact that one of the principal problems with the maintainence of the housing stock is the inefficiency of the direct labour organisations in many areas? Is that not aggravated by the refusal of Labour-controlled local authorities to accept the lowest tender from private contractors?

Mr. Ridley: I do not believe that the reason my hon. Friend gives is the only one. It seems to me that the essential need is for a local authority to get itself sufficient resources and to use those resources to secure the greatest value for money possible, to make sure that its housing stock does not deteriorate. It is not only rates and grant that are available to a local authority; it is the tenants' income itself, which could be spent on the tenants' houses, if there was a proper level of rent.

Mr. John Fraser: May we take it that we have therefore elicited from the Secretary of State that he agrees with the Audit Commission that there is a crisis of serious proportions in the condition of our local authority housing stock? If that is so, and the right hon. Gentleman talks, as he did recently when he was appointed, of prudent housekeeping how can it be prudent housekeeping when local authorities which have a legacy of system-built houses and non-traditional homes are sometimes not allowed to spend their own money to keep together houses that are literally falling apart? Surely it is just ideological nonsense to suggest that any help from the public sector will not solve the enormous problem identified by the Association of Metropolitan Authorities, the Audit Commission and his own Department.

Mr. Ridley: The hon. Gentleman must not put words into my mouth. I did not accept the Audit Commission's description of a crisis. As I said, I have not had a chance to study its report yet, and I am not commenting on it. I accept that there is a large element of disrepair in some local authority housing estates as well as in municipal estates. I should like to make just one point, that that disrepair should not have been allowed to arise. We have two things to do now. First, we have to see how best to clear up the areas of neglect of those local authorities. Secondly, we have to put it fairly on the line that local authorities should not allow further neglect and deterioration. Because several local authorities have neglected to keep their houses in a fit state for their tenants to live in the hon. Gentleman turns round and blames the Government. He should be blaming the local authorities, and he knows it.

Mr. Beaumont-Dark: rose—

Mr. Speaker: Mr.…

Mr. Beaumont-Dark: —Beaumont-Dark.

Mr. Speaker: Mr. Beaumont-Dark.

Mr. Beaumont-Dark: It does us all good to have our names forgotten at times.
Will my right hon. Friend accept congratulations from the Conservative Benches on attaining his distinguished office, to which I am sure he will lend his originality and interest? We shall watch with fascination his progress. Does my right hon. Friend accept that one of the problems that we have is that many of us are exactly and entirely behind the sale of council houses, which gives people choice, but feel that that money should then be available to repair the stock of council houses? If we delay spending £250 this year, it will be £400 next year and dereliction the year after. Could we not encourage both sale and repair, which would be to the benefit of all the people?

Mr. Ridley: I am grateful to my hon. Friend for his welcome and the even more attractive adjectives than those used by the hon. Member for Copeland (Dr. Cunningham). As Question Time goes on it gets better and better.
I agree with my hon. Friend that the combination of privatisation and repair of council houses is what we want, but on several estates the condition of the council houses is such that I do not believe that anybody would want to buy them as they are. That is a special problem, to which I intend to turn my attention, but let it be absolutely clear that I am saying only that I recognise that there is a problem in certain areas. At the same, time I believe that we must make sure that we do not get into a worse position, by ensuring that local authorities take their responsibilities seriously.

Local Government (Widdicombe Report)

Mr. Bruce: asked the Secretary of State for the Environment when he proposes to issue the Government's response to the Widdicombe report on local government practices and procedures; and if he will make a statement.

Mr. Clay: asked the Secretary of State for the Environment when he proposes to publish the final report of the Widdicombe committee on local government.

Mr. Chope: asked the Secretary of State for the Environment what response he has received to the publication of the main report of the Widdicombe committee on local government.

The Parliamentary Under-Secretary of State for the Environment (Mrs. Angela Rumbold): I refer the hon. Gentlemen and my hon. Friend to the answer given by my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne (Mr. Rowe) on 19 June.

Mr. Bruce: I thank the Minister for that helpful reply.

Mr. Allan Roberts: You have been "Rumbold"!

Mr. Bruce: Why have the Government been so quiet about the publication of the report, given the enthusiasm with which they set up the inquiry? Is it because the Widdicombe report has tackled the problem of one-party domination in local councils, has supported democracy in local councils and has made constructive recommendations on how to strengthen them? Will the Government recognise that not only must they consult, but that there must be an early debate in the House and that they must act on the recommendations?

Mrs. Rumbold: I am surprised that the hon. Gentleman believes that the report has been received quietly. It received wide coverage in the press and was welcomed widely by many people in local government. The report has responded fully to the concerns across party political lines that local democracy has been somewhat under threat in a few councils. As a result we have a good report, which contains about 88 proposals, which present a balanced and interrelated package. We shall have serious consultation on this matter.

Mr. Clay: Is it not true that the proposals to ban people of the rank of principal officer and above from effective political activity is the gravest attack on employment civil liberties since the banning of trade unions at GCHQ? Is it not true that the practice of party representatives attending council group meetings is almost as widespread in the Tory party as it is in the Labour party? The proposed ban is causing grave concern and disquiet. Will the Minister ensure that those aspects of the Widdicombe proposals which try to separate party politics from elected local government are rejected? If not, will she be consistent and demand the removal of the chairman of the Tory party from the Cabinet?

Mrs. Rumbold: I do not accept the later part of the hon. Gentleman's question. The report will be subject to the fullest and widest consultation among all the parties concerned. On his earlier point about principal officers and above not being allowed to sit on local councils, I remind him that no civil servants are allowed to be Members of this House.

Mr. Chope: Did my hon. Friend notice the warm reception given to the report in The Guardian editorial? Will that encourage her to seek early legislation to deal with the worst excesses of political corruption, which still cause consternation in local government?

Mrs. Rumbold: I understand my hon. Friend's anxiety about the worse excesses of political corruption. I read the warm response to the publication in The Guardian. I repeat that the package of 88 recommendations deserves sensible consideration and consultation before the Government take action.

Mr. Tony Banks: Does the Minister support the idea of ending one-party policy committees on local councils? If so, how will that apply to the London borough of Newham, where all 60 councillors are Labour and there is no opposition? Why is it different for central Government as opposed to local government? If we open policy committee meetings in local government, why not open them in central Government and allow the Opposition into Cabinet meetings?

Mrs. Rumbold: The House will not be in the slightest bit interested in my views on the report. My Department will be happy to receive the views of the hon. Member for Newham, North-West (Mr. Banks) on the report in due course.

Mr. Squire: Will my hon. Friend commend the members of the Widdicombe committee on an excellent job — at first sight — which demands much attention before we can make detailed comment? Will she note that the House would appreciate a full-scale debate in advance of the Government producing their proposals on Widdicombe, so that hon. Members can add their input to the important debate on the health of local government?

Mrs. Rumbold: I thank my hon. Friend for his remarks and draw his attention to the response of my right hon. Friend the Secretary of State to my hon. Friend the Member for Broxbourne the other day, when he thanked Mr. David Widdicombe and his fellow committee members most sincerely for their report and commented that the committee's study had been thorough and that the report was impressive in the extent of its coverage and the scope of its findings.
As for a debate on the report, that is a matter for my right hon. Friend the Leader of the House.

Dr. Cunningham: Will the Under-Secretary accept that the sort of language that she is using and the fact that she is responding to the question lead us to conclude that Widdicombe will be quietly sidelined by the Government, probably because it offers no justification for the wilder allegations of the Conservative party about the state of affairs of local government in this country? For example, does the Under-Secretary accept the comment of Mr. David Widdicombe in his foreword:
There is a solid base of normality in local government"?
Will the hon. Lady realise that we cannot accept not only the retention of personal surcharge, but its expansion to cover elected members in Scotland? We also cannot accept the proposal of Mr. Widdicombe's committee that chief executives should have extended legal powers over democratically elected councillors.
Widdicombe is disappointing because it has failed to address itself to the opportunity with which it was presented to strengthen and enhance local democracy in Britain.

Mrs. Rumbold: The hon. Member has made the point well that, whatever my lack of seniority, there is considerable uncertainty about the responses of Opposition Members and my hon. Friends, which points to the need for serious consideration through consultation. I hope that that will be achieved in the responses of hon. Members and the many outside organisations and individuals who are interested in local government.

Inner Cities

Mr. Knowles: asked the Secretary of State for the Environment what steps he is taking to encourage private sector involvement in the regeneration of the inner cities.

Mr. John Patten: The Housing and Planning Bill will enable assistance to be given to regeneration carried out by the private sector.

Mr. Knowles: I thank my hon. Friend for that reply, albeit ever so brief, but may I encourage him to go further and let us know about the prospects for more urban development corporations, what is to happen on urban regeneration grants and how decisions on that aspect will link with the announcement the other day of our right hon. and learned Friend the Paymaster General about inner cities?

Mr. Patten: The private sector created most of our great cities, and the private sector has a critical role to play in regenerating our great cities. That is why we are taking powers in the Housing and Planning Bill to pay urban regeneration grants. We are extremely grateful to all the Opposition parties for their support for those grants, which have also been welcomed by the private sector. Of course, urban development corporations are well worth considering, and we should perhaps be considering having more UDCs.

Mr. Alton: Does the Minister not agree that it might help to stimulate greater private sector investment in the inner cities if the Government looked again at whether VAT ought to be charged on building work in those areas and at the possibility of increasing the derelict land grant? Does the hon. Gentleman, have a word to say about last week's speech by the right hon. Member for Henley (Mr. Heseltine), who said that he was critical of the level of aid being given to inner cities by the Government?

Mr. Patten: We are spending at record levels on derelict land grants, and substantial amounts of derelict land—about 2,500 acres—are cleared in inner city areas every year. One problem is to make sure that something is put up on that land — houses or industry. We are trying, through urban development grants and the new urban regeneration grants, to attract as much private sector funding as possible. Our experience with the urban development grant shows that for every pound of public sector money put in, we attract between £4 and £5 of private sector money.

Mr. Chapman: Will my hon. Friend confirm that even if the Government doubled the resources presently going into the inner cities that would not begin to meet the size of the problem involved in tackling the necessary works? Therefore, the only way is to attract private investment, and the best way to do that is not merely to consider extending the UDC concept to other parts of inner cities, but actually to create them, and with the same commitment that we had when we created the new town corporations.

Mr. Patten: I note what my hon. Friend, with his considerable experience of these matters, says. I know of no observer of the inner city scene, be it my right hon. Friend the Member for Henley (Mr. Heseltine) or anybody else, who believes that public money alone will lead to the regeneration of the inner cities. That is why we desperately need to attract private sector money into the inner cities.

We are doing so. Urban regeneration grants will help. Urban development corporations may well help. My right hon. Friend the Secretary of State and I listen carefully to what my hon. Friend says.

Mr. Freeson: Will the Minister pursue with the Chancellor of the Exchequer the abolition of the Treasury rule that forbids housing associations from tying in housing association grants with borrowing from the private market for the provision of rented accommodation? Does he agree that this is one of the biggest stumbling blocks to the expansion of housing association rented accommodation during a period of severe restriction on public expenditure? Will he act on that?

Mr. Patten: I note what the right hon. Gentleman, with his long experience of these matters, has said. We have received some very interesting proposals from the Housing Corporation about these points. Also, from time to time, happily, I have the chance of discussions with my right hon. Friend the Chancellor of the Exchequer.

Mr. Cormack: When my hon. Friend is considering these matters, does he agree with me that the Henley approach is to be preferred to the Chertsey and Walton hypothesis?

Mr. Patten: I always listen carefully to all that my right hon. and hon. Friends have to say, and the speech of my right hon. Friend the Member for Henley was most thought provoking.

Mr. John Fraser: Does the Minister recognise that one very serious inhibition on small private investment in the inner cities is the great difficulty in places such as Brixton and Handsworth of obtaining insurance on business premises? Lambeth and Birmingham recently called a conference on these matters. What are the Government doing about it?

Mr. Patten: I am happy to say that my right hon. and learned Friend the Paymaster General is already looking at this issue in connection with the eight areas exercise. I think that that will produce some results in the not too distant future, which will be of great help right across the inner city scene.

Defective Housing (Basildon)

Mr. Amess: asked the Secretary of State for the Environment what recent representations he has received about repairing defective system-built housing in Basildon; and what action he proposes to take in consequence.

The Parliamentary Under-Secretary of State for the Environment (Mr. Richard Tracey): I have recently received a number of letters from my hon. Friend on behalf of his constituents and direct from owner-occupiers of houses built by Basildon development corporation, using the Lindsay Parkinson HSSB design. Recently I visited the area, together with my hon. Friend, and I hope to announce shortly what steps can be taken to assist.

Mr. Amess: I thank my hon. Friend and his Department for the assistance that they have so far been able to give to my constituents with their problems. I urge him to act as quickly as possible so that defective properties are repurchased, or the owners receive full compensation, or the properties are repaired, or are given a clean bill of health.

Mr. Tracey: I appreciate the various remedies that have been put forward by my hon. Friend, but, as I told him recently, I shall be very glad to have a meeting with representatives of the Vange Action Group. I am very conscious of the need for an early decision.

Mr. Hardy: May I say to the Minister with responsibility for sport that I hope that defective housing will be more successfully tackled than was the World Cup by the English football team? Serious though the problems may be in Basildon, may I make the point that this is a national problem and that it requires urgent attention and the provision of national assistance to local authorities and development corporations before the year is out?

Mr. Tracey: I hope that the hon. Gentleman will not consider that I am giving him the elbow, but housing in this country is considerably better than much of the housing that I saw when I was in Mexico. Of course, the Government of Mexico are much more closely associated with the party opposite than they are with the party of this side of the House.

Hon. Members: Send him off!

Mr. Speaker: Order. This is supposed to be about housing in Basildon.

Mr. Tracey: You are quite right, Mr. Speaker. The only housing that we know of similar to that in Basildon is in Watford.

Planning Decisions (Appeals)

Mr. Adley: asked the Secretary of State for the Environment if he will make it his policy to uphold on appeal the planning decisions of local authorities.

Mr. Tracey: No, Sir. The law requires that each case be decided on its merits.

Mr. Adley: That is a relief. Is my hon. Friend aware that the answer given earlier by the Secretary of State to the effect that the green belt, if protected by the structure plan, is safe with him will be welcome to many hon. Members on the Tory Benches, especially in the light of a grotesque application in my constituency to which objection has been taken not only by Christchurch council but by Wimborne and New Forest councils and by Dorset county council? Will my hon. Friend bear in mind that if district councils, as planning authorities, backed by county councils, begin to feel that every time they refuse an application that is contrary to the structure plan and which affects green belt land, those decisions will be overturned by his Department, local government will be even more disillusioned about central Government? Surely none of us wants to see that.

Mr. Tracey: My hon. Friend raises some interesting points. He will not expect me to comment on a specific case. He should raise the general aspect of this issue with my right hon. Friend when he and his colleagues meet him.

Mr. Simon Hughes: May I ask the Minister—

Mr. Campbell-Savours: Give him an easy one.

Mr. Hughes: I was about to say that I was going to give the Minister an easy ball. There has been a settlement whereby the Globe theatre is likely to be built on the South Bank. If the matter of planning in respect of this comes before the Department of the Environment, can the House

have the assurance that the Department will do everything it can to encourage the rebuilding of Shakespeare's Globe after 400 years?

Mr. Tracey: I was privileged to be born in Stratford-on-Avon and I have considerable sympathy for anything, to do with William Shakespeare. I am sure that the hon. Gentleman fully realises that all material matters will be considered.

Mr. Wiggin: Is my hon. Friend aware that many local authorities are being forced to make planning decisions against their wishes? That is because under the rules, the circulars and the structure plans, they know that if the matter goes to appeal and they lose it is likely to cost a great deal of money. Will he seriously consider the question of my hon. Friend the Member for Christchurch (Mr. Adley)?

Mr. Tracey: Since 1947 Parliament has provided a right of appeal to the Secretary of State against local planning decisions. In considering such appeals the Secretary of State will have regard to all material planning considerations. I repeat what I said to my hon. Friend the Member for Christchurch (Mr. Adley), that these general points should be raised at the meeting with my right hon. Friend the Secretary of State.

Mr. Tony Banks: The Minister has done well, so far. In view of his sports portfolio, will he take an interest in the planning permission to redevelop Stamford Bridge and call that in so as to make sure that we preserve good football at Stamford Bridge?

Mr. Tracey: I have once again to say that I cannot discuss the merits of any particular case at the Dispatch Box.

Palace of Westminster

Mr. Gerald Bowden: asked the Secretary of State for the Environment when he now expects the restoration of the exterior of the Palace of Westminster to be completed.

Sir George Young: The current work on the Terrace elevation and Lord Chancellor's Tower should he completed in November. Plans for the next phase are under consideration and I hope to make an announcement later in the year. There is much still to be done and it will take a number of years to complete this massive task.

Mr. Bowden: As the restoration work which has already been completed has done so much to enhance the architectural heritage of this part of London and proved such a popular tourist focus, we look forward with great anticipation to the completion of the work. May I, as a surveyor, ask my hon. Friend what stone cleaning technique he proposes to use for the remainder of the work —the wet or the dry?

Sir George Young: My hon. Friend is right to say that the Palace of Westminster is a major tourist attraction and that it is right to show it at its best. As for cleaning techniques, he rightly says that there are two approaches, one wet, one dry. The wet one heals the affected areas by the steady application of dripping water and the dry one involves a vigorous attack with air and grit. I prefer the former.

Local Authority Services

Mr. Corbett: asked the Secretary of State for the Environment how many responses have been received by his Department to the consultation paper, "Competition in the Provision of Local Authority Services", published in February 1985.

Mrs. Rumbold: My Department had received more than 450 responses by 30 October 1985, and a list of the main respondents was placed in the Library on that date. One or two further comments have been received since then.

Mr. Corbett: Will the Minister confirm that the majority of responses from councils of all political colours have opposed the compulsory extension of tendering? Is not the real answer to allow local councils to spend the money that they need to have the size of work force that they want to carry out their duties officially?

Mrs. Rumbold: No, Sir. The responses were varied and wide and it would be quite difficult to determine whether they came down on one side or the other. There are clear signs that competitive tendering has helped to provide efficient and effective services and that it does not disturb the good running of local authorities.

Urban Programme

Mr. Carttiss: asked the Secretary of State for the Environment how many jobs have been created under the urban programme.

Mr. John Patten: The urban programme has created or retained about 24,000 jobs each year through support to capital projects since it was substantially expanded in 1982–83, and projects approved for urban development grant should generate some 20,000 permanent jobs.

Mr. Speaker: I call Mr. Chope.

Mr.Carttiss: In the light of his reply, does my hon. Friend agree that well targeted—

Mr. Speaker: Order. I got the wrong name. I call Mr. Carttiss.

Mr. Carttiss: We seem to be in the business of getting the wrong names today, but never mind.
Does my hon. Friend agree that, in the light of his reply, well targeted schemes to help inner-city areas are a more effective way in which to promote economic growth and to provide real jobs in the community?

Mr. Patten: My hon. Friend is absolutely right. We need the best possible targeting on inner city areas which are suitable for development. Above all else, we must concentrate on areas where there can be the type of regeneration that leads to successful job creation, such as the urban programme has been responsible for. My right

hon. Friend the Secretary of State and I intend that, in future, the economic job-creating components of the urban programme will get an increased share of available moneys.

Mr. McNamara: Does the Minister agree that one of the major obstacles in the programme is the need for money to be spent by the end of the current financial year? Is he aware that, by delaying approval, his Department is putting an intolerable burden on local authorities, which must ensure that they get their specifications and tenders out and that the work is done by the end of the year?

Mr. Patten: I understand that my Department's urban housing renewal unit has, with the co-operation of the hon. Gentleman's city council, recently approved a scheme for one of the big housing estates in his constituency. The council is confident of being able to spend that money. It just requires proper co-operation and planning between the Department and the council. We are very pleased to help in Hull, and I hope that the hon. Gentleman's constituents are also pleased.

Local Authority Land (Planning Permission)

Mr. Nicholas Baker: asked the Secretary of State for the Environment if he will bring forward proposals to limit the power of local authorities to give planning permission over land they own.

Mr. Tracey: In general, the present arrangements for making this type of decision appear to operate satisfactorily, but the Select Committee on the Environment referred to this matter in its recent examination of witnesses and we shall consider the matter again if it makes recommendations on it in its forthcoming report.

Mr. Baker: I am grateful to my hon. Friend for that reply. However, will he look at the general principle, because there is something seriously wrong? Would he not be concerned, like me, if a local education authority, such as Dorset county council, gave itself permission to sell a piece of land belonging to a school playing field despite the objections of all the other local authorities and eveybody interested in, or adjacent to, the project? That is a matter of concern, and I hope that my hon. Friend will look into it.

Mr. Tracey: My hon. Friend will not expect me to comment on the particular case that he has raised. However, he can rest assured that we are sympathetic to his general point. Local planning authorities are, of course, answerable to their electorates for the way in which they discharge their responsibilities. They do not have complete freedom of action. However, my hon. Friend can rest assured that we shall consider the matter carefully.

African National Congress (Talks)

Mr. George Robertson: (by private notice) asked the Secretary of State for Foreign and Commonwealth Affairs, if he will make a statement on the talks yesterday with the African National Congress.

The Minister of State, Foreign and Commonwealth Office (Mrs. Lynda Chalker): At Her Majesty's Government's invitation, Mr. Oliver Tambo, acting president of the African National Congress, called on me on 24 June. I expressed grave concern at the continuing violence in South Africa and emphasised that violence could never lead to a solution to South Africa's problems. A suspension of violence on all sides was essential to create a climate for real dialogue and negotiations. I also stressed to Mr. Tambo the British Government's continuing commitment to the early and complete elimination of apartheid. It was a useful and candid exchange of views.

Mr. Robertson: I congratulate the Minister on her courage in changing the Prime Minister's line by meeting Mr. Oliver Tambo. We, and the majority of British people, warmly welcome the Government's recognition, however belated, of the reality that the ANC speaks for the voiceless millions in South Africa.
Does the Minister realise that that historic meeting will be seen as little more than a gesture unless it becomes part of a process of dialogue with real opinion in South Africa —a country described by Mrs. Helen Suzman last night as being like a latin American dictatorship—and part of a process of pressure, through meaningful sanctions, on the economy of South Africa? Even today's edition of the Financial Times says that the policies of the Government in Pretoria have finally made sanctions unavoidable.
Will the Government now take steps to protect Britain's national interest and international responsibilities? At the EEC summit tomorrow, will the Government finally take a lead in abandoning their role as the last supporters of apartheid in the world, and instead put the maximum pressure on South Africa in order to prevent the bloodshed predicted by the Eminent Persons Group? If the Minister needs guidance at this difficult time in her dealings with the ANC, will she look to the bankers and business men, who also met Mr. Tambo yesterday, and will she reject with contempt the isolated, unrepresentative voices from the past which may come from the Benches behind her?

Mrs. Chalker: Our meeting yesterday was a further step in our efforts to promote dialogue and a suspension of violence, following the official-level contacts which took place in February, and subsequently. It is generally held that the African National Congress represents a large number of black voices but not exclusively. I shall quote what Mr. Nelson Mandela said to Mrs. Helen Suzman on 5 May:
All groups across the political spectrum, including Chief Buthelezi's Inkatha, should be involved in negotiations for a new South Africa.
We cannot disagree with that sensible comment.
The hon. Gentleman asked for meaningful action. The European Council meets tomorrow and on Friday. My right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign and Commonwealth Secretary will have in mind all the possible meaningful

action that might need to be taken. We are concerned about British interests—of course we are—but we also want to bring an end to violence and make a real start to dialogue and negotiations. We shall have no hesitation in leading the way, in the most effective way possible, to bring about an end to apartheid.

Mr. Julian Amery: Does my hon. Friend agree that, while the ANC undoubtedly represents an important section of black African opinion in South Africa, it by no means represents the whole of that opinion, and perhaps not even a majority? Does my hon. Friend appreciate that her meeting with Mr. Tambo could have given the impression to moderate Africans, who are not pro-apartheid but are anti-ANC, that the British Government are coming down firmly in favour of regarding the ANC as the principal negotiating partner with whom Mr. Botha should be doing business? Will she take this opportunity to make it clear that we do not regard the ANC as the principal negotiating partner, but only one of many?

Mrs. Chalker: I can reassure my right hon. Friend that the African National Congress is indeed one of many. It is impossible to say exactly whether it represents the majority of black opinion, but as I said a few moments ago, it is clear that ANC leaders believe that other voices should also be heard in a dialogue between all peoples.
I do not think that the meeting that I held yesterday on behalf of Her Majesty's Government will give the wrong impression to other groups because I have always made it clear, as has my right hon. and learned Friend, that the dialogue has to be between all groups. The fact that Mr. Oliver Tambo was in London yesterday was a coincidence, so far as we were concerned, but it was an opportunity to open a dialogue which may be very valuable in bringing an end to violence and in making a start to dialogue and negotiation.

Mr. A. J. Beith: Is the hon. Lady aware that we welcome the meeting and the apparently constructive spirit in which it took place? Is the hon. Lady also willing to meet Dr. Allan Boesak of the United Democratic Front who is coming to, or might even be in, London? When the hon. Lady talks about the suspension of violence, does she realise that most of the violence is by the South African Government, with whom Her Majesty's Government are seeking a dialogue?

Mrs. Chalker: Any suggestions that Ministers should meet various people will be considered on their merits, as they occur and according to the situation at the time. Of course we condemn violence, from wherever it comes, because we firmly believe that no resolution of the awful problems in South Africa can be attained by continuing violence, whether it involves bombings in Durban, the awful bombings yesterday on Johannesburg, which we have condemned, or the earlier bombings on 19 May on Lusaka, Harare and Gaborone. They are all to be deplored.

Mr. Mark Carlisle: Does my hon. Friend accept that many of my right hon. and hon. Friends believe that she was right to see the ANC, as an important voice to be heard at this time? Will she repudiate totally the comment from the Opposition Front Bench that our party is the last supporter of apartheid? Will she remind the Opposition Front Bench that it was this Government


who managed to negotiate a settlement in Zimbabwe? Will she assure us that the Government, with our friends in the Commonwealth, will lead in taking any necessary measures to put all possible pressure on the South African Government to ensure the maintenance of the Commonwealth and the fundamental change needed in South Africa?

Mrs. Chalker: I wholeheartedly agree with my right hon. and learned Friend. We shall certainly never be lagging in our condemnation of apartheid. It is true that the settlement at the Lancaster house talks on Zimbabwe, however difficult it was to come by, shows good signs for the long term in bringing about the sort of multiracial society for which so many people in the Conservative party have worked so hard in the past.
Of course we want the Commonwealth to take a lead, and we want to take a lead within the Commonwealth. The most important action is to take effective measures, because to take measures that simply bring greater trouble would do no good, either for the Commonwealth or for this country, and certainly not for the black people of South Africa.

Mr. Tom Clarke: Will the hon. Lady continue to act with the courage that she demonstrated yesterday, and urge the Cabinet to ensure that any possible commission that involves Europe will consider sanctions as well as representations?
Will the hon. Lady deplore the actions of a regime that is obviously so insecure that not only has it cancelled its farcical press conferences but has felt it necessary to do what Mr. Gorbachev did not do — steal the shadow Foreign Secretary's camera?

Mrs. Chalker: I was not aware of the last violation of law that the hon. Gentleman mentioned.
Members of the Cabinet and my right hon. Friend the Prime Minister will go with an open mind and considerable information to the European Council, to our colleagues the leaders of the economic Seven and to the Commonwealth review Meeting to discuss in what effective way we can bring about a change of attitude by the South African Government.
Of course we deplore the actions of a regime that institutes a state of emergency with 180-day detentions. We have done that throughout, and we shall continue to do so. Representations are today being made to the South African Government, both in Pretoria and in London, about the state of emergency, the arrests and the detention without trial.

Sir Peter Emery: When carrying through Government policy after the interview yesterday, will my hon. Friend try to ensure that the Government do not find themselves isolated either from the Commonwealth or from the EEC in being unwilling to take the lead in positive action to show that we absolutely condemn the racist and repressive measures of the South African Government? We should be in the lead, not following.

Mrs. Chalker: I am grateful to my hon. Friend for what he has said. I shall draw his remarks to the attention of my right hon. and learned Friend the Foreign Secretary and of my right hon. Friend the Prime Minister.

Mr. Guy Barnett: Does the hon. Lady appreciate that violence by black South Africans cannot and will not be suspended until Nelson Mandela is released, and that peaceful negotiations cannot and will not begin until that happens?

Mrs. Chalker: The hon. Gentleman knows only too well that we have repeatedly called for the unconditional release of Nelson Mandela and other detainees, because we believe that that would release a man who could lead not only moderate opinion but some of those whose actions have become out of hand and who are under the control of no one. We hope that there will be an early unconditional release of Nelson Mandela and others like him.

Mr. Cyril D. Townsend: Should not the Foreign Office be congratulated on the timing of this cautious preliminary contact? Will my hon. Friend remind the House of the number of other European countries that have made similar contacts with the ANC? Is it not especially farcical to compare the position in South Africa with that in Northern Ireland?

Mrs. Chalker: My hon. Friend is absolutely right to say that it is wrong to compare the position in South Africa with that in Northern Ireland, where there is a universal franchise. The same position simply does not exist.
Whatever contacts each country of the European Community — or, indeed, the Commonwealth — is seeking, they must be carried out in the manner that is most effective in bringing an end to apartheid.

Mr. Martin Flannery: Is it not a fact that, where there is no democracy and there is brutal and terrible repression of the majority of the people on a racialist basis, the majority are bound at some stage to fight back and to use violence? Is it not also a fact that the real violence, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) said, was the state visit of Mr. Botha here, who was welcomed here not long ago by the Prime Minister against the wishes of the people? The Opposition welcome the discussions that the Minister has had with Mr. Tambo, but it is not sufficient merely to sympathise. We want economic sanctions imposed against South Africa to help the people of that country towards freedom.

Mrs. Chalker: I should remind the hon. Gentleman that only yesterday the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said:
I am grateful and flattered by the Prime Minister's interest … does she understand that the sanctions that will be most effective are not general economic sanctions but financial sanctions?"—[Official Report, 24 June 1986; Vol. 100, c. 177.]
That is the deputy leader of the Labour party. We understand the frustration of many people in South Africa, both black and white, but violence will not solve the problems of that country. An end to apartheid, however, will do a great deal to bring violence to an end. I remind the hon. Gentleman that dialogue means more than talking when suitable opportunities may occur to someone like Mr. Oliver Tambo; it means talking so as to influence the South African Government.

Mr. Anthony Nelson: Will my hon. Friend explain why, if it is wrong to receive the PLO because it refuses to eschew terrorism and violence, it was right to receive the ANC, which openly espouses such action?

Mrs. Chalker: Our official-level contacts and my meetings yesterday constitute an attempt which Her Majesty's Government believe should be made to try to bring an end to violence and a start to dialogue. The contacts that have occurred in the past involving the middle east and the links that have been established are to that very same end, which is to bring an end to violence.

Mr. Dave Nellist: In the representations that have been made today by the Government to the South African Government in Pretoria and elsewhere, what reference was made to the 115 key trade union leaders, ranging from shop stewards to general secretaries, who are part of the 3,000 who have been arrested and detained in the past 10 days? Many of these trade union leaders represent workers in the subsidiaries of British firms. What representations were made to secure their release? Or are the profits that come from the £12,000 million investment of British companies in South Africa more important than the rights of workers in that country?

Mrs. Chalker: As far as I am aware, the representations are being made at this very moment in London and Pretoria. Representations are being made on behalf of all

those who, under the state of emergency, have been arrested and detained, whether they be trade union leaders, church leaders, innocent churchgoers or anyone else.

Mr. Jerry Wiggin: Will my hon. Friend accept that she failed totally to answer the question of my hon. Friend the Member for Chichester (Mr. Nelson)? Do we now take it that the British Government will treat with terrorists?

Mrs. Chalker: As my hon. Friends have often said, we seek to promote dialogue to achieve negotiation. A man who certainly impressed yesterday with his total dislike of violence may indeed be able to help in that process towards dialogue and an end to violence. I have to say to my hon. Friend that I spent over half the time yesterday talking about the negative effects of violence and seeking not just to persuade but also to impress upon Mr. Tambo exactly how this, as well as any other violence, was exacerbating the situation. I believe that it was right to do so on behalf of Her Majesty's Government. We are in no way treating with terrorists. We are trying to solve a problem which the House believes has continued for far too long, and not trying to exacerbate it.

Opposition Day

17TH ALLOTTED DAY

Unemployed People (Mortgage Interest)

Mr. Speaker: I have selected the amendment in the name of the Prime Minister.

Mr. Michael Meacher: I beg to move, That this House condemns the Government's proposal to halve mortgage interest cover for the unemployed and others for the first six months of supplementary benefit, which will sharply increase mortgage arrears leading to evictions and undermine home ownership by discouraging building societies from lending to low earners; and calls on the Government to withdraw this proposal in the interests of a policy for the family which guarantees security of tenure of the family home.
Recently, the Prime Minister trumpeted, again, her belief in a policy for the family. It is difficult to think of any policy more damaging to the family than that which threatens it with the loss of its home, yet that is exactly the effect of the Government's intention to halve mortgage interest payments for the unemployed for the first six months of supplementary benefit. It will sentence thousands to rising mortgage arrears and evictions as a penalty for being unemployed.
Instead of concentrating help on those in greatest need, as the Government claim is the object of their social security policies, the measure will concentrate maximum harm precisely at the point when people need help most— when people, through no fault of their own, lose their job. Contrary to everything that the Government claim they stand for, it will undermine home ownership by discouraging building societies from lending to those on lower incomes, and it will be the final nail in the coffin that ditches thousands who exercise their right to buy.
The Government seek to justify all that on two grounds. First, they say that the cost of mortgage interest payments to supplementary benefit claimants has risen rapidly to too high a level. That is due partly to the spread of home ownership which the Government have encouraged and is partly due to higher house prices, for which claimants can hardly be held responsible.
The truth is that more is being spent because there are more claimants, especially more unemployed claimants, and their needs are greater because house prices have risen much faster than inflation. That is not a reason for denying people such help.
The Government's second pretext for the measure is that the help given is so generous that people are better off out of work. That result is arrived at, I submit, by the use of figures so studiously contrived that the Government are implicitly admitting the implausibility of their case.
The Government, according to their note supplied to the Social Security Advisory Committee, took the example of a £16,000 mortgage, which they say is the average mortgage for a two-child family, and related it to a family on low earnings—£80 to £120 a week. Virtually nobody on earnings as low as that would have a mortgage of £16,000. It is only that thoroughly implausible combination which yields the conclusion which the Government are so determined to fabricate—that a man buying a

house is better off out of work than in work. It is clear, to anyone who thinks about it for more than a moment, that the Government's figures and their conclusion are completely unreal.
Even if the work incentive argument had some force for unemployed claimants, it would be wholly irrelevant in almost half the cases. That is because a large number of owner-occupiers on supplementary benefit are not unemployed — they are pensioners or lone parents. In 1982, only 60 per cent. of owner occupiers claiming supplementary benefit were available for work. For the other 40 per cent., the discouragement to work argument, which is so precious to the Prime Minister, is irrelevant. I am well aware, of course, that the Government have tried to meet that objection by exempting pensioners from their proposals. But what about single parents and sick and disabled people? Are they to be sacrificed in the interests of the Prime Minister's obsession with the "why work" syndrome?
I put it to the House that the Government's case does not stand up to examination. The central principle called in aid by the Prime Minister in defence of this proposal in her letter to my right hon. Friend the Leader of the Opposition — it is repeated in the Government's amendment to our motion — points in precisely the opposite direction. In her letter, the right hon. Lady said:
The aim of the main proposal … is to strike a fair and reasonable balance between the borrower, the lender and the taxpayer.
Is it striking a fair balance for the Government to save £30 million by cutting mortgage interest payments to the poorest people on supplementary benefit, while at the same time paying out £370 million in mortgage tax relief to the top earners on more than £30,000 a year? Is it striking a fair balance to select for cuts in mortgage interest payments the 90,000 households — the Government's figure—in poverty who are struggling to buy a house while, at the same time, those households getting mortgage interest tax relief at the top rate of 60 per cent., who also happen to number 90,000 households, are left to enjoy their privileges untouched? Far from striking a fair balance, I submit that these proposals will produce grotesque unfairness between those in desperate need facing eviction and those on the highest incomes who cream off ever bigger tax perks every year.
Like several other measures in the Social Security Bill, this proposal is almost universally condemned. A Child Poverty Action Group survey of the responses of 60 key organisations to the Green Paper found no support for the proposal, even from the Institute of Directors, which is well known for its support for the Government on almost everything else. The National Consumer Council in its booklet entitled "Behind with the Mortgage", which was published last year, states:
The safety net provided by mortgage interest payments to those owners faced with unemployment or relationship breakdown is crucial in avoiding repossession and homelessness during the early stages of default when financial problems may escalate to such a level that it becomes impossible to recover from them.
The Building Societies Association, which is the body most concerned about this —it is very concerned—declared in last year's report entitled "Mortgage Repayment Difficulties" that cuts in supplementary benefit would lead
to a much greater increase in arrears and repossessions.
The Institute of Housing, in its response to the Green Paper, asks that


assistance with interest payments be continued at the same level for the meantime.
Referring to one of the other points which Ministers have used to mitigate the damage done by the proposal, the institute went on to say that it:
considers it unlikely that mortgage insurance arrangements, in their present form and premium level, could fill the gap provided by supplementary benefit for either the long-term unemployed or low-income owner-occupiers.
The matter has been referred to the Social Security Advisory Committee, the Government's advisory body, but I think that we already well know its views. It stated:
We do not think a scheme of this kind could be justified at all, unless the building societies and other mortgage lending bodies were prepared to give comprehensive assurances about the availability of rescheduling.
Of course, no such assurances have been given, and it is unlikely that they will be.
By far the most telling of all, in my view, is the report of the Department's own policy inspectorate which does not support the Government's case. Out of a sample of 330 claimants it shows that the average mortgage payment was £72 a month and supplementary benefit cover will now be withdrawn for nearly half that sum. The report is in the Library and many hon. Members may have seen it. However, one in four are paying between £100 and £250 a month. For them, with an average mortgage of about £15,000—if anything, that is a conservative figure—the interest payment is about £34 a week. Therefore, the Government are proposing to cut their weekly income by no less than £17. In the year-long bitter miners' strike the Government docked £17 a week off the miners. The Government are now transferring their vindictiveness to home owners and kicking the most vulnerable of them when they are down.
Further, there is no doubt that this measure will cause intense hardship. Already the trend for repossession is rising sharply, even before the measure is introduced. In 1979, building societies repossessed 2,500 homes and by last year, the number was seven times that at 16,500. Since, the Government's own admission—

Mr. Eric S. Heffer: Is my hon. Friend aware — I hope that he will go to Liverpool to see — that there are streets upon streets of houses in Liverpool where two or three years ago there were no "For sale" signs. Increasingly, people are now being faced with having to sell and if they cannot sell they are being faced with eviction. That is a growing trend, especially in an area such as Liverpool with its terribly high level of unemployment. This measure will increase that trend and make it absolutely appalling for the people in those areas.

Mr. Meacher: My hon. Friend is correct. It is undoubtedly inner-city areas—Liverpool is as hard hit as any—that will bear the brunt of this measure if the Government are unwise and callous enough to put it through.
By the Government's own admision, 90,000 households will be affected by the latest proposal. Therefore, it must be certain that the rate of repossession and eviction— this is the point of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—will double or perhaps increase by even more, to at least 30,000 to 50,000 a year. It is easy in the House to give simple figures of that kind, but those figures conceal an enormous amount of personal misery. I hope that all hon. Members will agree that there is little worse in human experience than being driven from one's own home.
The fact that that will undoubtedly happen is revealed by the DHSS policy inspectorate's own report. It found that more than a quarter of the claimants in the sample had already been forced to approach the lender for a reduction in their mortgage payments. However, only two thirds had been able to negotiate a reduction, usually for only three months at a time. All those people were asking was to be allowed to pay the whole of their mortgage interest. Imagine what would have happened if they had approached the lenders and said that they wanted to pay only half the interest. Even under the present rules one claimant had been forced to put his home up for sale, and two others were under pressure to do so. Surely, under these proposals, that number is bound to rise dramatically.
There are other less obvious but no less damaging consequences. If mortgage interest is not met in full for the first six months on benefit but instead the loan is rescheduled at a higher amount once the six months is over, which is what the Government are proposing and hoping, a claimant could well have less incentive to return to work. The rescheduled payment could have risen to a level difficult to manage on low wages, and I believe that there would then be a strong temptation to remain on supplementary benefit until a better paid job came along. I put that to the Government because it is very important to their case.
There is another irony in the Government's proposal, the whole aim of which is to save £30 million. It may turn out, even in financial terms, to be counter-productive. Mortgage arrears are increasingly a significant cause of homelessness. In 1985, one in every 10 families was homeless owing to mortgage arrears. That is double the figure of four years ago. Since many of those made homeless as a result of mortgage arrears end up in bed and breakfast accommodation—I submit that many of them will— the financial cost to the DHSS could easily turn out to be greater than the £30 million which it is hoped to save.
From that standpoint, the proposal to restrict mortgage interest payments through supplementary benefit presents a totally false economy, quite apart from the morality of it. I am simply talking here about the financial aspect. If the Government are determined to make savings in this area, a much fairer and more rewarding route would be to restrict mortgage interest tax relief to the standard rate. That would save £250 million, eight times as much as this proposal, without any of its immensely damaging side effects.
By contrast, this proposal will indirectly press building societies into restricting their lending to those in secure employment. It will discourage lending down market in all cases that are marginal or where people are at risk of unemployment. By the same token, it will also probably threaten the Government's inner-city initiative because building societies will be unwilling to invest in low-cost properties mortgaged with those risks. Furthermore, this proposal will ensure that home owners are treated significantly less generously in future than tenants. It is remarkable that we should have such a proposal from the Government and it is a discrimination which sits extremely oddly with the Government's constantly expressed policy of encouraging owner occupation as the preferred form of tenure.
If the Government genuinely believe that there is a problem of escalating benefit expenditure on mortgage interest, they should tackle its causes, which are high


unemployment and high interest rates, rather than its symptoms. What is not acceptable, especially from a Government who like to talk of concentrating help on those in need and from a Prime Minister who likes to talk about a policy for the family, is a proposal which deliberately hits families precisely when they are most vulnerable. That is why we now unreservedly call on the Government to withdraw this proposal in the interests of a genuine policy for the family which guarantees that most priceless asset for all families, security of tenure in the family home.

The Minister for Social Security (Mr. Tony Newton): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
'congratulates the Government on the success of its policies to encourage home ownership; recognises the need to achieve a proper balance between the responsibilities of the borrower, the lender and the tax payer, and greater fairness as between those on Supplementary Benefit for short periods and those in low paid employment; and notes the proposals to this end that the Government has put forward for consultation to the Social Security Advisory Committee.'.
I feel bound to comment at the outset that there is something faintly ironic in the sight and sound of the hon. Member for Oldham, West, (Mr. Meacher) appearing today as the homeowners' friend. It is barely a year, if that, since the newspapers were full of stories, to the horror of his right hon. and hone Friends, of his desire completely to abolish mortgage interest tax relief. His dedication to that cause is a byword throughout the country.

Mr. Meacher: I do not want to intervene but I must if the Minister is going to start his remarks with a deliberate fabrication of that kind. I ask him to withdraw. I never made any such allegation, I do not believe it, and I never said it. I remind him that we are not talking today about whether people are wealthy enough to receive tax relief at a certain level, but about people in desperate poverty and whether aid should be taken away from them, leading to eviction.

Mr. Newton: All I can say is that the hon. Gentleman succeeded in misleading a large part of the British press and most of his colleagues on his Front Bench by the proposals that he put forward a year or so ago. What is more, it is a matter of clear public knowledge that throughout the past six years the Labour party at national and, more important in this context, local level, has dragged its feet on the sale of council houses and on the increased right to buy that the present Government have ensured. Whatever else may be said about today's debate, the spectacle of the Labour Front Bench seeking to parade as the party of home ownership lacks a good deal of credibility.

Mr. Robert B. Jones: My hon. Friend does not need to go as far back as the speech made by the hon. Member for Oldham, West (Mr. Meacher). Had he been present in yesterday's debate, he would have heard the hon. Member for Bootle (Mr. Roberts), speaking from the Opposition Front Bench, say that tax relief on mortgages of £12,000 or so was acceptable, but tax relief on mortgages verging on £30,000 was unacceptable, implying what the Labour party would do.

Mr. Newton: I did not have the privilege of hearing the hon. Member for Bootle (Mr. Roberts), but that would fit with the position that the Labour party adopted at the general election, which was one of hostility to the modest increase that the Conservative Government had made in the size of mortgages that could rank for tax relief. The fact is that the Labour party has consistently opposed almost every practical step that has been taken to encourage home ownership.
The truth is that we are having this debate today only because the hon. Member for Oldham, West has been frustrated in some of his ambitions in the past. If he had had his way, the people for whom he now claims to speak would not be receiving supplementary benefit for mortgage interest because he would have seen to it that they would never have become home owners in the first place. That is the reality of the position that the hon. Gentleman has sought to create. His appearance today is about as credible as Dracula turning up as a blood donor.
As I said when we previously debated this proposal, there has been no mystery about the Government's view that this area of the benefits system needed consideration and review, or, indeed, about the Government's thinking on what the conclusion might be. As I reminded the House on the previous occasion when we debated the issue briefly during the passage of the Social Security Bill, the Green Paper published almost exactly a year ago specifically said:
The Government intend to discuss with building societies and other interested bodies arrangements whereby less of the burden—particularly for people on benefit for a short time — falls immediately and directly on the social security system.
That proposition was echoed in the White Paper at the end of last year, in which we said:
The Government will continue to discuss with building societies and other major lenders what changes might be appropriate, including the possibility of a limit on the proportion of mortgage interest which would be met during an initial period in receipt of benefit.
My right hon. Friend the Secretary of State referred to the same matter when he gave evidence to the Select Committee on Social Services in January. It was raised in Committee on the Social Security Bill, a fact that the hon. Member for Oldham, West appeared to have forgotten on the last occasion when he spoke about the matter. The hon. Member for Derby, South (Mrs. Beckett) asked me about it, and again I specifically set out the nature and direction of our thinking.
What is more, far from seeking to disguise the fact that we felt that that area needed examination and what sort of examination we were undertaking, we took specific steps to amend the leaflets which, under the right-to-buy legislation, go to those inquiring about their right to buy. We amended the leaflet to draw specific attention to the fact that the Government had made the proposal. It was amended last year, to draw attention to what had been in the Green Paper. Indeed, an addendum note was added to it after the White Paper, to make it absolutely clear what the Government's thinking was.
Therefore, I refute any suggestion of the sort that has been made, to the effect that the Government have proceeded in a stealthy or underhand way. We have made our intentions clear to the House. We have made our intentions clear to those considering buying their property under the right-to-buy legislation. We are now proceeding in an absolutely normal, above board and straightforward


way to put forward proposals for public consultation to the Social Security Advisory Committee. Of course, we shall consider its view.

Mr. Anthony Beaumont-Dark: My view on this potential Bill is well known—I think that it is somewhat less than satisfactory. As I understood it, many of us complained at the time that the social security payments going to people were not being used for the purposes for which the money was being given. They were being used for something else. If the money goes directly to a building society or the person who holds the mortgage, that is common sense because it stops people being dispossessed of their homes. Will my hon. Friend explain to some of us who are somewhat unhappy how he thinks it helps to add to people's worries at their most vulnerable time—their first six months of unemployment, which must be appalling? How can one explain to them that there is not a lack of generosity of spirit in the proposal, which is not what I would call good Conservatism?

Mr. Newton: I shall come directly to my hon. Friend's point, which is about the fairness of the system, and the balance between the claims of different claimants in the system — in this case, according to the time that they have been on benefit. However, I should like to make it clear that that issue is separate from that of whether this or any other part of the benefit system is abused. Abuse might occur within the present or future rules. That might happen because it is just as possible that half the interest will not get passed on as that the whole of the interest was not passed on. That problem needs to be addressed. However, that is separate from the broader issues that my hon. Friend has raised, to which I shall come in a moment.

Mr. Robin Maxwell-Hyslop: My hon. Friend referred to the amended leaflet. Is it or is it not the Government's intention to renege on the undertaking given in the unamended leaflet to people who bought their homes, that if they received unemployment or supplementary benefit, the interest would be paid? Is it or is it not the Government's intention to renege on that undertaking, given in writing in the leaflet, on the basis of which people entered into commitments which otherwise they might not have entered into?

Mr. Newton: I appreciate the implication of my hon. Friend's question, but it seems to me that, as with any leaflet describing the benefits system, such a leaflet can be taken only as a description of the position at the time when it is published. I think that that is commonly understood.
I note my hon. Friend's point, and I was aware of his concern. I ask him to consider that the implication of his question, if carried to its logical conclusion, would go far wider than the specific issue of whether this part of the benfit system should be changed. In the situation that my hon. Friend adumbrated, a person's entitlement to supplementary benefit could be affected by a variety of changes. For example, the substantial increase in invalidity benefit that the Government made at the social security uprating before last, in November 1984, took many long-term sick and disabled people out of supplementary benefit because it increased their invalidity benefit. On the logic that my hon. Friend has been putting forward, that, too, could be construed as a change affecting their entitlement to the full payment of mortgage interest.

Ms. Clare Short: No one would claim to have been misled if a change is made from which he gains.

Mr. Newton: The basic fact is that, to be entitled to benefit for mortgage interest, one has to be on supplementary benefit. Therefore, the logic of my hon. Friend's implied position is that anything that changes the potential entitlement to supplementary benefit of someone buying his own house is to be treated in the way he has suggested. At the very least, I ask my hon. Friend to take account of that position, but above all I ask him to take account of the fact that leaflets, whether about the right to buy or describing the social security benefits system, can be taken only as a description of the position at the time when they are published.
Let me now refer to the proposals. I should like to clear one thing out of the way before I come to the proposal that is the main focus of the debate. I should make it clear that there are several other proposals in the draft regulations that have been put to the Social Security Advisory Committee, of which the House should be reminded. Two of these proposals are designed to be beneficial to claimants and I hope that they will be welcomed by the House in that respect.
The first is designed to ensure that a loan taken out to repay an earlier advance used to acquire an interest in a home or to carry out essential repairs or improvements to it will be eligible for benefit on the same basis as an original loan. That is entirely beneficial and I assume that Opposition Members and others will welcome that.
The second proposal is for a special disregard of income from mortgage protection policies to meet the balance of mortgage payments. That is a sensible and beneficial provision which must be considered in the context of the main proposal and which I am sure that the House will welcome.
There are also two other smaller proposals designed to allow greater scope to tighten up on the extent to which the benefits system helps to meet payments on loans taken out for business purposes or payments on very expensive or large homes with a high mortgage. It was implicit in the remarks made by the hon. Member for Oldham, West that it is reasonable—whatever else we may disagree about—to impose limits on a system which is primarily intended to help protect an individual's interest in the home in which he or she lives.

Mr. Max Madden: The Minister has referred to the Social Security Bill and the Government's thinking on certain aspects of the Bill. Bearing in mind the defeat that the Government suffered on the Bill in another place, and accepting the great anxiety of many people who would be adversely affected by the Bill if it is enacted, will the Minister take this opportunity to explain the Government's intentions about the proposals?

Mr. Newton: I am glad to see that you are smiling, Mr. Deputy Speaker. You will no doubt respond generously to my immediate evasion of the hon. Gentleman's request as that would take us well beyond the rules of order in the context of this debate.
I am happy to tell the House that the Government were not defeated in another place on the proposal that we are discussing today. This proposal was brought in in another


place by a side wind. The proposal was not contained in the Social Security Bill as originaly drafted. It was introduced by a side wind.

Ms. Clare Short: What is a side wind?

Mr. Newton: That is an amendment that dragged the proposal into the context of discussion on the Bill. Their Lordships kindly did not press the matter to a vote and we were not defeated on the issue. I will not comment further on the other points raised by the hon. Member for Bradford, West (Mr. Madden).

Mr. Frank Field: Why not?

Mr. Newton: I will not comment on them because to do so would be out of order.
I would now like to consider the principal proposal and the points of concern expressed by Opposition Members and by one or two of my hon. Friends. The main proposal, as the House is aware, is to limit the amount of supplementary benefit payable for mortgage interest to 50 per cent. of the total for the first six months on benefit for everyone under 60 years of age. The hon. Member for Oldham, West rightly acknowledged that that does not apply to people over pensionable age or to those slightly under pensionable age in respect of men.
Some people might have been led to believe, by the controversy that attended the matter when the proposal was announced, that we proposed to abolish supplementary payments for mortgage interest. Quite apart from the issue affecting those aged over 60, it is important to understand the limited nature of the proposals. They fully protect those whose claims continue beyond six months and they do not affect those over 60. Our estimate, as the hon. Member for Oldham, West has acknowledged, is that the proposals affect about one fifth of the expenditure in that area — £30 million out of a total of £150 million. They will affect some 90,000 claimants at any one time. The figure of £30 million compares with £9,000 million which is paid to building societies in mortgage interest. The 90,000 figure must be considered against the 6 million borrowers.
We have made it clear that when a claim lasts more than six months, mortgage interest would be met in full. Moreover, where the limitation has caused arrears and these are capitalised into a higher outstanding loan, the extra interest on the higher loan would also be met. That is specifically designed to protect the position of those whose claim does not turn out to be short term.
I must stress to my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) that, despite the numbers of people who, unhappily, are unemployed for longer periods, most spells of unemployment, even now, are relatively short. Approximately one quarter of the people who become unemployed leave the register within four weeks. Half leave it within three months and two thirds within six months.

Mr. Beaumont-Dark: My hon. Friend continues to raise more worries as to why the hell we are messing with this matter. If, on my hon. Friend's figures, most people are unemployed for only a short time, two thirds for this much time and one third for that much time, we seem to be causing a lot of misery, woe and concern for peanuts. Why are we doing that? I suggest that my hon. Friend should say little and try to get the proposals through.

Mr. Newton: I hope that my hon. Friend will not dismiss the point that I was trying to make, especially as the hon. Member for Oldham, West specifically said that in some cases these payments can amount to significant sums of money and run into hundreds of pounds a month. In fact, people would probably lose tax relief as a result of the hon. Gentleman's proposal. It is legitimate to ask whether mortgage payments for people with large mortgages and in normally well-paid jobs, who may simply be between jobs or unemployed for a short period, should be completely picked up on supplementary benefit from day one—

Mr. Frank Field: rose—

Mr. Newton: —and paid for through the tax system by many people whose income over the year will be significantly less than those to whom the supplementary benefit payments are being made. An issue of equity is involved, especially when we consider people with large mortgages who are out of work for short periods. I hope that my hon. Friend the Member for Selly Oak will not dismiss that point.

Mr. Field: I am grateful to the Minister for giving way after he has drawn our attention to the reasons why the House should not support those people who are unemployed and who probably vote Tory rather than for any other party. Is not the Minister misleading the House when he suggests that these unemployed people immediately become eligible for supplementary benefit? Many people do not become eligible for supplementary benefit for a long time. It is not a case of people with large mortgage payments opting out of jobs and opting on to benefit. These people will have suffered a considerable drop of income over a long period of time before they receive benefit.

Mr. Newton: That may be true in some cases but not in as many as I suspect the hon. Gentleman may think. It will, of course, depend on the amount of capital the person possesses and that may rule him out of supplementary benefit.
I am sure that the hon. Member for Birkenhead (Mr. Field), with his expertise, would agree that if someone—albeit with a large income but who may conceivably have mortgaged himself to a high level and does not have much capital—unhappily falls into this position, the existence of the large mortgage is likely to bring him immediately on to supplementary benefit. If he has a mortgage payment of £200 or £250 a month, his supplementary benefit entitlement would be some £250 and £300 a month or possibly more if he has two or three children. In those circumstances it is unlikely that any other entitlement to income would rule him out of supplementary benefit. He may well get immediate payment of supplementary benefit for mortgage interest from the outset because of the sheer size of the mortgage.

Mr. Field: What the Minister says is true, but he still needs to explain to the House why the Government are bringing in a measure that will hit their supporters more than any others.

Mr. Newton: The Government have made it clear that one of their concerns is to ensure fairness between groups within the benefits system and especially for those who are in low-paid employment, but not in the benefits system. In addition, we are anxious to focus the available resources


as effectively as possible on those who most clearly need help. That is the context in which our proposal is put forward.

Mr. Keith Raffan: My hon. Friend must accept that the Government's proposal will increase anxiety among the unemployed. It must do so. Even if, as my hon. Friend rightly said, most people are unemployed for a relatively short period, they do not know that they will be unemployed for only a short time. In two towns in my constituency where 41 per cent. of the men are unemployed, the Government's proposal is increasing anxiety enormously. Even if people want to sell their homes, they cannot do so because there is no market for them. There are at least half a dozen families in my constituency where the fathers commute 300 or 400 miles during the week to get jobs, while supporting their homes in my constituency. There is no way that my hon. Friend can get away from the fact that the Government's proposal will increase anxiety.

Mr. Newton: I recognise the force with which my hon. Friend speaks and we shall take account of his anxieties alongside the considerations that I am putting forward. I must ask him to bear in mind that mortgage payments can also be a source of anxiety to those in relatively low-paid employment, who will often be paying the taxes to meet the needs on which my hon. Friend focused.
It is right for the Government to consider the balance between the various considerations, and that is precisely what we are seeking to do. We think that it is appropriate to strike a balance—

Ms. Clare Short: Will the hon. Gentleman give way?

Mr. Newton: Yes, but I had better not give way too often, because I am sure that a number of hon. Friends wish to take part in this debate.

Ms. Short: I am grateful to the hon. Gentleman. He must know that low-paid workers are most vulnerable to unemployment and intermittent spells of unemployment. The Government's proposal will hit those people. Will the Minister please not talk about people with massive mortgages? Such people are usually wealthy and will often have savings. They will not be hit. The low-paid struggling to keep out of unemployment — possibly going in and out of unemployment—will be worried, frightened and hurt by the Government's proposal.

Mr. Newton: That group can find that they are worse off being in low-paid employment than being on benefit. The linking rule proposals accept that there is a problem about people who are in work for short periods. We have sought to ensure in the draft regulations that they will not be disadvantaged.
We are seeking to strike a balance between a variety of considerations, including the amount of help that borrowers can legitimately expect to receive from the benefits system in securing a capital asset that will normally grow in value, the guarantee that a lender should expect from the benefits system in protecting the loan that he advances and what it is reasonable to expect the taxpayer to bear.
We have sought a balance that takes account of what is reasonable and sustainable for the borrower. The latest estimate of the average payment of supplementary benefit for the first six months on benefit is £16 per week. On that basis, the average amount to be paid on an outstanding

mortgage if a claim lasted for the full six months—as I said, many will not — would be about £200, which hardly merits the sort of language used by the hon. Member for Oldham, West.
I am sorry that my hon. Friend the Member for Selly Oak has temporarily left his place, because I wanted to tell him that another consideration is equity between home owners who are out of work and can receive full payment of mortgage interest from the first day on benefit and home owners in work, but on low incomes that may not be much above the benefits that they would receive if they were out of work.
The hon. Member for Oldham, West raised a number of issues in connection with the figures that we put to the Social Security Advisory Committee. I do not think that the hon. Gentleman questioned the validity of the figures, which clearly show that working families with a £16,000 mortgage, which is the average loan outstanding for such families, have an income while out of work that is appreciably higher than their income while in work if they are in the earnings range of £80 to £120 a week. As to whether those families are representative—a point raised by the hon. Member for Oldham, West—the available data show that there were 130,000 working families — with children—who have mortgages of over £10,000 and earnings below £150 a week. Of those families, 30,000 had mortgages of over £20,000. The problem of equity cannot be dismissed as a trivial one.
We also provided data for families with a £10,000 mortgage and they showed that for the earnings range £80 to £120 a week, income from supplementary benefit was very close to income from work. Whatever else Opposition Members say, I hope that they will recognise that a problem exists.
Alongside our proposals and some of the considerations that led the Government to put those proposals before the SSAC, I have tried to put to the House the view that anyone concerned with the equity of the benefits system and the balance of demands made on the taxpayer and on those receiving benefits must address a range of questions.
There are questions to be asked about whether it is reasonable that the taxpayer should pick up the whole of the bill for purchasing an appreciating capital asset from the first day on benefit, even for what may be very short periods and when many of those paying the bills may be little or no better off than those whose bills are being paid.

Mr. Nick Raynsford: Will the hon. Gentleman give way?

Mr. Newton: No. I have given way enough.
There are questions about whether it is right that lenders should expect or be given the guarantee that this part of the benefits system implies and about whether we should maintain a system that can undoubtedly contribute significantly to the unemployment trap, which all of us agree should be tackled. We must also ask how far such expenditure can be seen as a proper priority at a time when there are so many other pressing demands.
I say no more to the House than that those are problems which can and should be addressed within our overall plans for social security, which seek to make the system fairer between those who are in work and those who are out of work, to tackle the unemployment trap and, above all, to ensure that the huge resources devoted


to social security are channelled as effectively as possible to those who most clearly need the help that the taxpayer can and should provide.
Our proposals seek to address those problems. They have been put forward for consultation in the normal way and we shall, of course, consider the outcome of that consultation carefully and fully before coming to any final conclusions. We shall also consider what is said in the debate. In that spirit, I invite the House to reject the motion and endorse the Government's amendment.

Mr. Gordon Oakes: I am one of the two Opposition Members who are vice-presidents of the Building Societies Association. It is not a financial interest, but merely an honorary job, and I would have mentioned it only in passing if the Minister had not tried to cover up one of the weakest cases that I have ever heard presented to the House by making an aggressive attack on my hon. Friend the Member for Oldham, West (Mr. Meacher) and the Labour party.
The building societies movement, started largely in the north of England, came from the pennies of the poor. It was a working-class movement of people who tried to buy their own houses to save themselves from being ground down by landlords. The Tory party tried to hijack the owner-occupier from the building societies. The Government's proposals show the House, the owner-occupier and the public just how thin is their real love of the owner-occupier.
This takes me back to my childhood. My father bought his house, but my father-in-law, who worked in the same factory, steadfastly refused to buy his house. He could have afforded it, because he had more money than my father. He was a plumber, whereas my father was a labourer and a chargehand. My father-in-law would not buy his house because of the fear that if he lost his job he would be unable to keep up the mortgage repayments. Because of his fear, he lived instead in a council house. The Government are bringing back that fear.
I am appalled by how little the Minister understands the psychology of somebody who suddenly finds that he is out of work. These proposals will attack, not the long-term unemployed, but those who are out of work for the first six months. The hon. Member for Delyn (Mr. Raffan) clearly understands this point. He told his right hon. Friend the Secretary of State for Social Services that when a man becomes unemployed he does not know whether he will ever find work again. If he is lucky, he will be in work again within three or six months. However, he does not know that. He may be out of work for ever. In a constituency such as mine, or the consituency of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), the likelihood is that if a person loses his job he will be out of work for ever.

Mr. Raffan: Does the right hon. Gentleman agree that this measure discriminates most against those parts of the country that are hardest hit by unemployment? In my constituency a quarter of the labour force have lost their jobs in the last 15 years. These are the people who will be hit the hardest. They know that they will be out of work for at least six months. This measure will break their backs. They are desperately looking for jobs, but there are no jobs for them.

Mr. Oakes: I am grateful to the hon. Gentleman for what he has said. He is another Member with sense on that side of the House. I hope that he and the hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) will prevail upon the Government to drop these stupid proposals.
The reasons for the proposals have varied. The Green Paper "Reform of Social Security", volume 2, Cmnd. 9518, argued in paragraph 2.92:
The government wish to introduce changes in the system to reduce the discouragement for owner-occupiers to return to work that can apply under the present interest payment commitment.
The Minister did not say that today. The spokesman for the Department of Health and Social Security did not say that either. The reasons that the Department gave were to
reduce the inequity in treatment between home owners on benefit and those in work: share responsibility for helping those on benefit with mortgage liabilities between the state and the borrowers, and lending organisations; reduce the burden on the taxpayer; not affect long-term pensioners".
The Minister does not dare to say that the proposals will discourage owner-occupiers from returning to work, but that is precisely what they will do. If a home owner becomes unemployed because of the Government's policies, after six months the Government's darling is no longer loved. The home owner becomes a feckless individual who will not go back to work because he wants the state to pay his mortgage. That is precisely what the Government are saying in these proposals.
The Minister referred to the inequity between a person in work who is paying a mortgage and a person who, through no fault of his own, loses his job and is on the dole. I repeat that the most vulnerable time when he is on the dole is the first few weeks. His whole world collapses and he finds that he may also lose his home. The Building Societies Association and individual building societies say —the hon. Member for Delyn will appreciate this point — that when people become unemployed the vast majority of them will starve rather than reduce their mortgage commitments. They pay their mortgages up to the hilt and hope that their building societies never find out that they have lost their jobs. They are ashamed to be out of work. Above all else, they will try to keep a roof over their heads. The same is true of council tenants. Above all other expenses, they will pay their rent. That is an ordinary, working-class concept which the Minister probably does not appreciate.
I have already mentioned that the Minister referred to inequity. Let me therefore consider two semi-detached houses on a council estate. In one of the semi-detached houses there is an owner-occupier. He has been led—or misled—by the Government into buying his house. Next door, there is a local authority tenant. If the Minister is looking for inequity, he can find it there. The owner-occupier finds that, for the first six months, half his mortgage interest cover disappears at a stroke. However, the council house tenant next door does not find that half of the rent is taken away from his supplementary benefit.
I hesitate to push the anomaly too far. Knowing this Government, their next step will be to cut by half their payment of rent to council tenants who are on supplementary benefit. That is a glaring inequity. The owner-occupier will say to the Government — a Government who are proud of the fact that they introduced the right of ownership — "The chap next


door was right. He is better off than I am. I was a fool to buy this house and to listen to you. Where do I stand now?"
The inequity goes much further than the full payment of rent. I understand that the amount that the DHSS allows a person who is on supplementary benefit for the maintenance of the insurance premiums on his home is £1·85 a week. The average cost, taking into account both maintenance and insurance, is at least £6 a week. Therefore, he is worse off even without this measure, which will reduce the amount of money that he receives.
I speak, not on the behalf of the association, but as a vice-president of the Building Societies Association. I deplore the cynical way in which the Government intend to halve mortgage interest cover for the first six months. They know perfectly well that building societies are mutual institutions and that they are also caring institutions, They care about their borrowers. If payments are missed for a few months because somebody is ill or out of work, all he needs to do is to tell his building society, and in 99 per cent. of cases the building society will look after him and say that it is a temporary lapse.
If the borrowers cannot meet their interest payments during the first six months, the Government hope that the building societies will carry them. They hope that the building societies will pick up the tab for the Department of Health and Social Security. I think that the building societies will do just that. However, it is both unjust and inequitable. It is inequitable because building societies are not companies. They are mutual institutions. Having picked up the tab, the building societies will pass it on to other borrowers and to investors. However, it gets the DHSS off the hook.
I thought that the Minister was going to say that people should insure against redundancy. I am glad that he did not do so. It is possible to insure against redundancy, but the problem is that those who insure against redundancy feel almost certain that they will never become redundant. The vast majority of borrowers do not take out that kind of cover. If a section of the community were to insure against redundancy, and they were almost certain to benefit from it, the premiums would be impossibly high and the ordinary borrower would be unable to afford to take out insurance against redundancy.

Mrs. Edwina Currie: Is the right hon. Gentleman aware that at least one of the policies of that kind that I have seen offers insurance against redundancy for up for two years? It costs only £39, irrespective of the size of the mortgage, and covers the whole of that two-year period.

Mr. Oakes: As the hon. Lady says, that is for a two-year period. A person who is taking on a mortgage and who takes out insurance usually takes out health and redundancy insurance. The insurance companies encourage people to take out health insurance as well. The hon. Lady said it costs £39 for two-year cover, but the vast majority of people do not take out such insurance and are unlikely to do it unless they feel that they are likely to become victims of unemployment.
The country at large believes that the Government have introduced this measure largely out of spite because of the way in which building societies behaved during the miners' strike. Miners are good customers of building societies. They are respected by the societies, and when the building

societies knew that the miners were in a temporary difficulty they looked after them during the difficult period of the strike. I think that because of that the societies incurred the wrath of the Government. Many miners are owner-occupiers, especially in the north of England.
If the Government really believe that their darling owner-occupiers on whom they have prided themselves in the past are the feckless people that this measure suggests, and that they will not work because the Government are paying their mortgages, a simple remedy is available — treat mortgage interest payments for a person on supplementary benefit in the same way as rent payments are treated. That means direct payment of the interest to the building society by the agreement of the borrower and his building society.

Mr. Newton: I almost sought to intervene a moment ago, but restrained myself. The right hon. Gentleman missed the point in what he said about the expectations of the building societies in relation to those on benefits. Large numbers of people who may have similar difficulties with their mortgages may not be on supplementary benefit, and the building societies and mutual associations will readily and rightly help such people for the sort of time that we are talking about.
The right hon. Gentleman went further and praised the building societies for the help that they gave to the miners who were on strike for a long time. Is he saying that it is right for the building societies to be expected to assist people on strike, thereby depriving themselves of income, but entirely wrong to expect them to adopt a similar approach to those who are in difficulty for any other reason?

Mr. Oakes: The Minister has misunderstood what I said, perhaps maliciously. Building societies are mutual institutions that are owned by their members, and the borrower is just as much a member as the investor. A different relationship exists between a building society borrower and any other sort of debtor. That is because he joined the building society when he became a borrower and is a member of that society.
If the Minister thinks that people who are unemployed are feckless and likely not to return to work, he could introduce a system of direct payment of interest to building societies in the same way as there is direct payment of rent to local authorities. Many building society borrowers would welcome that. They worry about their mortgages being paid and would voluntarily enter into such an agreement with the DHSS. Many of my constituents ask me whether they should write to the DHSS office about the direct payment of rent. They want to do that so that they can be sure that they will not fall into temptation and get into difficulties with their rent.
This is a miserable measure, which attacks people when they are most vulnerable. The Government hope that because they are caring associations the building societies will carry the cost. I hope that the Minister will not go ahead with his proposals and that he will listen not only to the Opposition but to the wise words uttered in interventions by his own hon. Friends.

Mr. Gwilym Jones: I welcome the new proposals that my hon. Friend the Minister has described — the proposals that cover further advances and


mortgage protection policies. If it is necessary, I declare my interest as a director of an insurance broking company. The disregard for mortgage protection policies will be most useful. I have been kind so far, but I am afraid that I may not be so kind hereafter.
I should like to make three points about the Government's proposals. First, if the motive behind these proposals is simply the achievement of an economy I am totally opposed to them, because that reason alone would not be justification for the proposals. The figure that has been suggested is £30 million, but that theoretical projection is unlikely to be achieved, for reasons I shall give in a moment. I am just as anxious about what I would describe as the psychological effect of these proposals as about their practical effects—in exactly the way that my hon. Friend the Member for Delyn (Mr. Raffan) described the matter in his first intervention, when he spoke about the anxiety of unemployment.
My hon. Friend the Minister is right to be apprehensive about any disincentive to return to work in the existing arrangements. He pointed to the relatively favourable position of people on benefit when they were compared especially to low-income families that were in work. My own apprehensions are about exactly that effect being achieved by the proposals. It is possible for the scope of these proposed changes easily to be exaggerated —usually for political reasons, as happened during the speech by the hon. Member for Oldham, West (Mr. Meacher).
The proposals provide for a 50 per cent. reduction in the first six months; thereafter, interest payments will be met in full. I see that change during and after six months providing a positive incentive for exactly what my hon. Friend the Minister must not want to see. I anticipate that some of those who find themselves in this position will recognise the loss that they are incurring in the first six months on supplementary benefit and will be encouraged to prolong unemployment beyond the six months in an attempt to recoup what they initially lost. I am sure that the Minister does not want to see that, any more than any hon. Member would want to see it.
Worse still, that disincentive to return to employment might become a permanent feeling. I am sure that all hon. Members agree that we ought to offer every encouragement to the spirit of enterprise in people who, through no fault of their own, find themselves out of work.
I do not want to make any exemptions here, but of all the cases that would be covered, the ones that come most easily to mind are the cases of executive and middle management people and those making their way in careers that have been interrupted too early. In a positive manner we ought to offer them every encouragement for a return to work. We should not do that in a negative fashion but should seek to end the position of such people being a cost to the taxpayer. That is a desirable objective, but equally important is their own contribution to wealth production and the continued regeneration of the economy.

Mr. Neil Thorne: I accept my hon. Friend's perfectly reasonable concern for those who are unemployed and for the difficulties that they face. I am sure he would also wish to be fair to taxpayers. It would be wrong for the taxpayer to allow an unemployed person to benefit from a capital gain at the taxpayers' expense.

Does my hon. Friend feel that a fairer way to deal with the matter would be for the person who needs to go to the DHSS for help with payments to agree to an entry being made against his land registry title to the effect that any capital gain acquired should be recouped by the taxpayer when the property is sold?

Mr. Jones: I am grateful for that intervention. I am aware of the need to be fair to the taxpayer. Nor should we ignore the comparison with people in low-paid work. We should do everything possible to encourage people back into work and to stop them being a cost to the taxpayer, but my hon. Friend's proposition of a notation in the land registry about any capital gain made for the relevant period would be difficult to achieve in theory, let alone in practice. People might try to sell their house in an area in which unemployment is felt heavily, but there may be no sale and no capital gain because others in the area are in the same boat.
The theoretical savings of £30 million will not necessarily be achieved. The right hon. Member for Halton (Mr. Oakes) spoke about transferring the burden from taxpayers to building societies. The saving will not necessarily be made, because most building societies will try to be as reasonable and helpful as possible to borrowers. It is likely that building societies will accept 50 per cent. of interest payments for the first six months as a matter of course, rolling up the rest of the payment until after that time, when the 50 per cent. saved would have to be picked up by supplementary benefit. The burden on building societies would be thus relieved, with no saving for the taxpayer.
There might be room for abuse in the present arrangements for supplementary benefit mortgage interest payments. That is less likely to happen when a person is unemployed and has no immediate prospect of employment than when a person is unemployed but has a reasonable certainty of employment before too long. Such a person might take advantage of the supplementary benefit payments to bear mortgage interest payments. Such cases are not likely to be many and the proposal of a six-month period to cover them is excessive. We are taking a sledgehammer to crack a nut.
I listened to what my hon. Friend the Minister said and I shall listen to the rest of the debate. I cannot promise that I shall be able to support him when the House divides, but we are talking only about proposals in draft. They have not yet received the formal consideration of the Social Security Advisory Committee. If they return to the House in anything like their present form, I would not be able to support them. It would be far better if they did not come back, and never saw the light of day.

Mr. Archy Kirkwood: I agree with much of what the hon. Member for Cardiff, North (Mr. Jones) said. He advanced a potent argument about the psychological, as opposed to the practical, effect of these proposals. He also mentioned the disincentives that they might lead to. He rightly observed that building societies might mitigate the cost of mortgage interest by accepting only 50 per cent. of it for the first six months. His arguments led me to my original conclusion, that, as he said, we are taking a heavy sledgehammer to crack a nut.
The Minister started by belabouring the official Opposition Front Bench about their attitude to the sale of


council houses. He rightly observed that the Government are intent on increasing home ownership. That being so, an increase under this Budget heading must have been inevitable. Between 1975 and 1983 expenditure on mortgage interest relief has increased more than seven times and expenditure on supplementary benefit has increased more than four times. What level of expenditure would the Minister countenance as reasonable? There must be an acceptable increase. The Government have to make a judgment about that.

Mr. Newton: The hon. Gentleman will have noticed that I did not refer to the level of expenditure at all in my speech. I put the weight of the argument on fairness, equity and incentives, which are the real points at issue.

Mr. Kirkwood: If the Minister tells me that, I accept it, but I suspect that the Treasury saw the increase and obliged DHSS Ministers to make a change.
The Minister also said that there has been no mystery about how the proposals have been introduced. That is true for the proposal concerning mortgage interest repayments. I might have missed something, but I did not think that, when the proposals were first mooted in the Green Paper and then followed through to the White Paper, they would affect the disabled and single parents. The Minister referred, almost in passing, to the other two changes concerning home loans for business purposes and restrictions on unnecessarily high costs in relation to other housing in the area. I may have missed something, but I believe that neither of those changes saw the light of day until a few days ago. There is therefore an element of mystery.
The Minister's case was minimalist. The more I listened to it, the more I agreed with the hon. Member for Birmingham, Selly Oak (M r. Beaumont-Dark), who said that the game was not worth the candle in terms of the anxiety caused. In an intervention a moment ago, the Minister said that he is interested in equity. What representations has he had from low-paid workers that this is a monstrous inequity which they want put right? He said that this issue must be addressed. It sounds as though he as been forced, lobbied and pressed heavily by a group of people who consider themselves to be at a disadvantage. Has the Minister had any representations to that effect? I doubt whether he has. If he is interested in the equity argument, the answer is clear and is lying in his hand for him to use if he wishes. As was suggested to the housing benefit review team, he should apply standard housing benefit and extend it to mortgage interest payments to redress positively, not negatively, the question of equity.
The Minister said that the issue must be addressed. However, as I understand it, the concept of the welfare state is to make provision for unaccountable misfortune and circumstances that cannot be foreseen. A classic example would be people who suddenly and unaccountably lose their jobs. In such circumstances, for the welfare state to withdraw an element of support, as the Government seek to do, would run counter to the provision, thrust and principles of the welfare state.
This is a sneaky move in so far as the Minister is taking £30 million out of the budget of people who do not know that this may happen to them. It is a soft target, because who knows when he may lose his job or be caught by this provision? It is an easy cut to make because no organised

lobby will protest against it, apart from Government Back-Bench Members, such as the hon. Members for Delyn (Mr. Raffan), for Selly Oak and for Cardiff, North, who are acutely on the ball in this regard.
This is a false economy. Have the Government taken into account the increase in housing benefit that will accrue as a result of the changes if arrangements are not entered into with building societies simply to roll over the payments, so that the supplementary benefit system will pick them up after six months? Surely people will be made homeless as a result. If they are made homeless, they will be priority cases for local authority housing, and that would lead straight to housing benefit applications and claims. Does the £30 million that the Government hope to save take into account the increased cost of housing benefit? If not, the Government have got their sums wrong.
The Minister and the Government generally have made great play of their consultations with the building societies and local authority associations. That was as far as we got in Standing Committee in terms of a positive response from the Government at any stage when the issue was raised. I have yet to see — again, I may have missed them — any results from the consultations that the Government had with the local authority associations or the building societies. I should be interested to read any exchanges, correspondence or minutes of meetings that suggest that any of the organisations were enthusiastic about or warmly endorsed this proposal.
The Government are making some play of the fact that mortgage protection policies are available to mitigate some of the worst effects of the change. As a practising solicitor before I became a Member of Parliament. I was involved with mortgage protection policies, so I know that they have extremely restricted provisions. Only the larger building societies offer them, and then only in restricted circumstances. The Government should not adduce them as a measure of protection available to people who would otherwise be hit by the proposals.
I have in the past seen the Minister persuade his Back-Bench Members with an almost impossible brief, but having listened carefully to him today, I think that he has signally, for the first time, failed to a greater extent than at any time during the two years in which I have been watching him.

Mrs. Edwina Currie: I have listened with interest to the comments made by the Opposition. I wonder whether hon. Members realise that it has never been automatic to pay 100 per cent. of mortgage interest. I have examined several Supplementary Benefits Commission reports, and I was interested to find that one of its annual reports drew our attention to the increasing cost of mortgage interest repayments. It stated:
Our policy is to regard these outgoings … as reasonable for supplementary benefit purposes if they were reasonable at the time they were entered into. If they were not, the claimant is given at least six months to move.
That was from the 1979 report, Cmnd. 8033.
Even the Labour Government were being rotten to mortgage interest claimants on supplementary benefit. Any suggestion that is started to happen, or was proposed, under this Government is nonsense. Those rules have been in operation for a long time.

Mr. Raynsford: Does the hon. Lady accept that there is a difference between that provision, which remains part of the supplementary benefit scheme ensuring that excessive payments are not made to people who have overextended themselves, and which is a necessary safeguard, and a completely arbitrary cut, irrespective of whether outgoings are reasonable, which is what the Government propose?

Mrs. Currie: Provided that the hon. Gentleman will accept—I am sure that he made a lot of fuss about it in those days—that the Labour Government did it, too.

Mrs. Margaret Beckett: That was the Supplementary Benefits Commission—

Mrs. Currie: I am sure that the hon. Lady will get an opportunity to make her own speech later.
It is well to remind ourselves, if we may, of the genesis of these proposals. During the year-long miners' strike, striking miners did not qualify for full benefits. They managed very well on the supplementary benefit paid over for their mortgages. The building societies actively cooperated and colluded with them during that time. As a result, the DHSS, not the National Union of Mineworkers, was the main source of finance and support for the families of striking miners, and as a result extensively prolonged the strike.
My local pitmen were different from those who received such assistance in two ways: first, they had a ballot; and secondly, they voted to work and did just that. As a result, they had no extra help with their mortgages during those 12 months. They felt exceedingly badly about that. The strike should have come to a conclusion far sooner than it did, and had the building societies not acted as they did, I am sure that Mr. Scargill would have got his comeuppance much sooner.
It is also worth pointing out that this is the main form of assistance for housing that is still paid to the householder. Under housing benefit, council rents and rates are paid direct, and only private rental property allowance, which represents a tiny percentage of the total paid in housing benefit, is paid to the householder.

Mr. Raynsford: Will the hon. Lady give way? Mrs. Currie: No, not again.

Mr. Raynsford: On a point of information.

Mrs. Currie: No. The hon. Gentleman, who is extremely talented and knowledgeable, will no doubt make his contribution in a few moments.
As the right hon. Member for Halton (Mr. Oakes) rightly said, we could tackle the problem differently. It might be better to change the rules and make them closer to those for other housing benefit claimants, so that supplementary benefit would be paid straight to the building society and could be used only against mortgage interest payments. That would achieve the objective of protecting a man's home without giving assistance and encouragement to industrial disputes. I commend that suggestion to the Minister. I understand from a written reply that it is already done for mortgage defaulters or others if it is
in the overriding interests of the claimant or his family to do so."—[Official Report, 12 February 1985; Vol. 73, c. 158.]
We have that right and that power and, if we were being really hard-nosed, tough and aggressive during an industrial dispute, we might use that power once again.
We are a long way from the miners' strike, and it is unlikely that, at least as long as we have a Conservative Government led by my right hon. Friend the Prime Minister, there will be another miners' strike or another similar industrial dispute. I noticed that the teachers made sure that their pockets were not hit in any way during their strike and that they did not make any claims on the social security system.
The Government have three objectives, and they are all laudable: first, to reduce spending, which is something that we were twice elected to do. We have not been terribly good at it, but we intended to do it. The second objective is to encourage people to take responsibility for themselves and for their welfare. That is a necessary objective in a free society. The third objective is to avoid the disincentive of returning to work if the payment for that work is not sufficient to pay the mortgage. Some of those objectives have been welcomed by responsible bodies. In paragraph 337 of its fourth report of 1985, in which it responded to the Green Paper, the Social Security Advisory Committee said:
We accept that for some claimants the present arrangements may operate as a disincentive"—
it gives an illustration of this—
and that it is also questionable whether public funds should be used to help individuals acquire an appreciating capital asset whilst they are dependent on means-tested benefit.
A Building Societies Association report, published in January 1985, also recognised the supplementary benefit scheme as
almost certainly the most generous in the world.
Therefore, we should recognise that some of the Government's proposals have had their supporters.
I am a little sceptical about the claim to save money. My hon. Friend the Minister will know that I always want to know what social security proposals will cost, whether we shall save anything, or whether they will — as is usually the case—end up costing much more. The first thing that I found was that the DHSS does not know how much it spends on this sort of benefit. In a written answer on 23 May 1986, which was addressed to the hon. Member for Shelter, the hon. Member for Fulham (Mr. Raynsford), it was announced that the DHSS knew the cost in 1983—£150 million—and thought that it knew how many people had claimed in 1984–277,000—but that it did not know the cost for 1984 or for 1985. I could lay odds that it does not know the cost now, yet mortgage interest information has been collected as a separate item since 1983. Somebody must know.
It is a little alarming that we should be asked to swallow whole the claim that a lot of money will be saved when the Government do not know the cost in the first place. I am also slightly sceptical about the suggestion that we will save £35 million. I hope that my hon. Friend the Minister can answer this point. He spoke about 90,000 people and a cost of £200 each. That works out at not £35 million but £18 million. In that case, it looks as though we are taking a substantial sledgehammer to crack a nut.
If it is only 90,000 people at any one time, it would be interesting to know how the DHSS reached a figure of £35 million, whether it has any idea of how many people will be affected, and if so, who. It works out that the figure is about £8 a week, but I am slightly sceptical, because the social security policy inspectorate, which did some research on this issue, found that the average payment for the entire mortgage was £16·64 a week in 1984. Of that, th amount for interest was only £12·11 a week. That


suggests that we would be saving about £6 a week, not £8. However, I look forward to the comments of my hon. Friend the Minister.
My hon. Friend the Minister knows that I support almost anything that saves money on the social security bill. I just want to be sure that we do save money, and that the savings are not a chimera that will vanish if the essential administrative costs, such as finding out how much the darned thing costs in the first place, are added up.
The Government's proposals may well achieve other objectives that are less desirable, particularly to Conservatives. They may well discourage home ownership in some parts of the United Kingdom. I do not think that they would do so in my part of the United Kingdom, where unemployment is low, but they may well have an effect on some families who, until this Government came to power, had no choice but to be council tenants. I refer, for example, to single-parent families.
The social security inspectorate inquiry found that on the whole claimants had managed to negotiate and were able to maintain their payments. Thus, the proposals may not affect existing borrowers, but they may well affect potential owner-occupiers. We do not want to put people off from owning their own homes. In particular, we do not want to treat those living on council estates differently. But it just does not wash to argue that the proposals will make people homeless. We are talking about £6 a week, when somebody may be obtaining benefit of £100 or more. Thus, the proposals may well be neither here nor there in that respect, but the myth will have its effect, and that may well discourage the few people whom we most want to care for.
I support another suggestion that has been made. My hon. Friend the Minister will remember that I wrote to him at the time of the Green Paper to ask whether he was serious about the proposals. He told me that he was pursuing discussions with the insurance companies. I believe that we should chase up the possibility of getting proper insurance cover. This would probably save nearly all the £150 million which, back in 1983 at least, we thought the scheme cost. It would encourage more home ownership, because people would have some security. It would help to make people more responsible and would prevent funds being used during industrial disputes. The insurance companies would be exceedingly loth to pay out to a claimant who had himself been responsible for his circumstances.
I believe that we should make private redundancy and sickness insurance compulsory for all mortgage holders. There are already redundancy policies. The best ones seem to come from Yorkshire, where there seems to be some true grit. The Skipton building society is offering loans with a rate guaranteed to stay at 9·9 per cent. as long as people take redundancy insurance through General Accident and Life Assurance Corporation plc. The Scarborough building society is offering a mortgage care insurance scheme, providing cover against redundancy, sickness, or any other event that may prevent a borrower from working. That costs only £5 a month for every £100 of mortgage payment and works out at roughly £5 for every £10,000 borrowed, which is peanuts.

Mr. Kirkwood: I have listened to the hon. Lady carefully, and she is making an important point. Does she accept that people do not make much use of such policies

at present? If so, and the hon. Lady's suggestion is taken up, more people will have such policies and the premiums will go sky high.

Mrs. Currie: On the contrary. I am not an expert on insurance, but, as the right hon. Member for Halton said, most of those who take out policies are those who face the risk of redundancy. If such policies are compulsory, the risks will be spread much more widely, so there will be no reason for premiums to rise.
The National Association of Estate Agents has a scheme entitled the redundancy mortgage protection scheme, which helps the borrower to pay his mortgage instalments for a period of up to two years. It covers endowment mortgages as well. It costs just £39 for the initial two-year period. Again, that is peanuts. If the cost of such schemes to the insurance companies is so low now, I cannot imagine that it would rise if all of us, even including hon. Members were protected similarly. I believe that the cost would fall and that it would be very good business. It is worth pointing out that all those schemes are much more generous than any scheme that the Government could afford.
I tried to find out how much business the insurance companies were doing, but that turned out to be difficult. because they cross-subsidise. However, according to figures published by the Association of British Insurers, premiums for permanent health and other long-term insurances in the United Kingdom, which would include this type of insurance, increased from £129 million in 1984 to £142 million in 1985. I bet that those firms would not accept that sort of business unless they found it extremely worth while.

Dr. Norman A. Godman: Will the hon. Lady give way?

Mrs. Currie: Just briefly.

Dr. Godman: I promise to be brief, and I am grateful to the hon. Lady. Are there any geographical differences in the insurance premiums that she has advocated at such length? If there are, I rather think that my constituents would have to pay higher premiums, because the current male unemployment rate in my constituency — unlike that in hers—is fully 26 per cent.

Mrs. Currie: I take the hon. Gentleman's point. I cited the National Association of Estate Agents and its scheme. However, in many parts of the country, including the hon. Gentleman's constituency, housing is much cheaper, and mortgages are consequently much smaller. There may well, therefore, be some balancing out.
If we take the view that we do not allow someone on the road without compulsory insurance, perhaps we should not allow anyone to take out a mortgage without some compulsory insurance that has an element of protection against falling earnings. The Government could then leave the supplementary benefit rules intact, and could protect their caring image, which we are all keen they should do. The state would not be needed. We could save, not £18 million or £35 million, but perhaps more than £100 million of good public money. We could then put it to better use by making, for example, tax cuts, and by returning that money to the taxpayers' pockets.
Whenever an attempt is made to cut the take from the taxpayer by altering social security provison, Opposition Members react like a flock of radioactive sheep. They bleat


loudly and disagreeably and glow gently from their exertions. They recognise neither the problem nor the worthwhile objectives of the Government. They do not propose any solutions, and intend only to keep on spending. That is why I am happy to support the Government in the Lobby, but I hope that they will rethink parts of the proposal and in so doing look after the interests of the home owner and the taxpayer alike.

Mr. Nick Raynsford: This has been an extraordinary debate, because, with the exception of the hon. Member for Derbyshire, South (Mrs. Currie), the Minister has clearly had the greatest difficulty in ensuring any support from his Back Benchers, and has had considerable difficulty in sustaining his argument. It is clear that the measure that we are debating is not just wrong in principle but damaging to a large number of people. It is untimely. It flies in the face of public opinion and the informed opinion of those who have commented on the Government's social security Green Paper, and in the face of the opinion on the Government's Back Benches.
What is all this for? We are talking about a possible saving of £30 million—hardly a significant sum. There are even doubts as to whether the full amount of that will be saved. We are not talking about large numbers of people but about approximately 90,000 out of the 277,000 who, at the last count, were recorded as receiving assistance towards their mortgage interest payments from the DHSS. I hasten to add, as a correction to what the hon. Member for Derbyshire, South said, that this is not the largest group of people receiving direct assistance towards household costs. I tried to intervene earlier to put her right. Approximately 1 million households in the private sector are receiving rent allowance. I am sure that she would not have wanted to mislead the House on that.
The background of the measure is the extension of owner-occupation, a continuous trend for many years and one that has been supported by the Government, but which has inevitably involved an increase in the number of home owners on low incomes. Therefore, there are more home owners at risk of getting into difficulty over repayments. The increase in mortgage arrears was referred to by my hon. Friend the Member for Oldham, West (Mr. Meacher), and I reiterate the scale of the figures. At the time of the 1979 general election, when the Government came to office, there were 8,420 households with building society mortgages more than six months in arrears. By 1983, the figure had risen to 32,000 and by 1985 to 60,390. A further 14,000 were similarly in arrears over local authority mortgages.
That considerable increase has been accelerating, and is paralleled by a serious increase in the number of repossessions by building societies, from just 2,500 houses in 1979 to 7,000 in 1983 and to no fewer than 16,590 last year. That is a huge surge in the number of people who lose their homes because the building society repossesses, generally because of mortgage default. A further 1,000 homes were repossessed by local authorities in 1985. That gives a measure of the scale and increase of the problem. It is hardly surprising, given the increasing trend—

Dr. Godman: My hon. Friend has referred to the scale of the problem, which is truly staggering. I ask him a

question similar to that which I asked the hon. Member for Derbyshire, South (Mrs. Currie) earlier. Has he any information concerning the geographical distribution of these scandalously high statistics of repossessions?

Mr. Raynsford: Unfortunately, I do not have any information immediately available, but information on which I can touch later will concern the incidence of homelessness relating to mortgage difficulties, and shows that the problem is particularly acute in the north, but not much of a worry in London and the south-east. There is a regional bias to the north in terms of homelessness and that may be reflected in the mortgage difficulties, although I do not have the precise figures.
It is not surprising, given the background of those figures and the increasing number of people in difficulty, that DHSS expenditure on mortgage support has gone up. It would be amazing if it had not. One of the few points on which I agree with the hon. Member for Derbyshire, South is that it is somewhat unfortunate that the DHSS is not able to give figures of the cost for later than 1983. That seems a rather poor basis for policy making. In 1983, it cost £150 million.
Such a figure is small in proportion to total social security expenditure and to the other form of assistance for mortgages — the mortgage interest tax relief arrangements. To cut this assistance now, against the background of an escalating problem, and growing need, and a larger number of people at risk of having their homes repossessed, is remarkably irresponsible, even by the Government's standards.
Let us look at the argument advanced in favour of this change. The Minister has already conceded that the cost argument is not fundamental, but he nevertheless advanced it. The cost is hardly enormous when compared to mortgage interest tax relief, which has gone up from £1 billion in 1979 to £4·75 billion—an enormous escalation. Of that, some £250 million or more is paid out in higher rate tax relief. In other words, it is going solely to people with substantial incomes. If it were necessary for the Government to seek savings from home owners, and if they wished to do so without hurting them, they would target it on those best able to take the cut. Those paying at the higher rate would be the obvious target. The Government would be taking away benefit from people who would not be hurt and a much better saving would be yielded — £250 million as against £30 million—were they to make savings at the expense of home owners who could well afford to pay a little more towards housing costs. It is interesting that this group has not been targeted, and that says a great deal about the Government's social priorities and values.
Those figures also show much about the Government's second argument, that of equity. The Minister argued that the present arrangements were unfair on low-income home owners and I agree that that is a case. The present arrangements do not ensure adequate assistance for low-income home owners at work, who may be having difficulties meeting their repayment costs with the relatively small amount of assistance that they get from the mortgage interest tax relief. They may have even greater difficulty in meeting unexpected additional costs—for example, repairs.
The inadequacy of the mortgage interest tax relief for low-income home owners is clear. The average value of mortgage interest tax relief for those on low incomes—


of, say, between £4,000 and £5,000—worked out at the last count at some £250 a year. For those with an income of over £30,000 a years, whom it might be assumed could afford to do with a little less assistance, the average value of mortgage interest tax relief is some £1,400 a year—almost six times as much. This is a measure of how inequitable the current system is. It gives the greatest assistance to those who could perfectly well cope with less but it does not give adequate assistance to those on low incomes who need more towards their mortgage repayment costs.
Low-income home owners get assistance towards their rates, under the housing benefit scheme. Here we come to the nub of the matter. Is there not an acute anomaly if low-income home owners can get assistance towards their rates under the housing benefit scheme but not towards their mortgage repayments? That anomaly was identified by the housing benefit review team appointed by the Government to look into the issue. It reported with a recommendation that the anomaly could be covered by making mortgage interest payments eligible for assistance under the housing benefit scheme. That is an equitable proposal.
The Government did not accept that proposal. I suspect that they did not, simply because the estimated cost was £100 million, but this returns us to the argument about how such costs could be met. If the Government were serious in their view, which was much talked about in the social security review, of the need to target assistance more effectively on those most in need, withdrawing assistance from those who could probably do without it would ensure that there was real value for money. If those paying tax at the higher rate and getting £250 million of mortgage interest tax relief, lost that help, the Government could afford to fund the housing benefit scheme covering mortgage interest payments and make a saving. That is the answer if the Government are serious about equity. Unfortunately, I do not believe that they are serious.
The Government's proposals are not as damaging or severe as originally foreshadowed in the White Paper. Those proposals were universally condemned. In response to that condemnation the Government, rather than doing the sensible and obvious, and accepting that they had blundered, decided to be weak. They watered down the proposals to make them less severe and hoped that they would get away with it. How often have we observed that response to criticism from the present Government, particularly from the Social Security Advisory Committee and others?
The Government have gone a bit too far. They have trimmed the proposals in the hope that they would get away with it, so now we have a watered-down fag-end of a proposal which is less extreme than the original because it does not affect all those who are assisted with mortgage repayments and does not cover all the payments during the first six months. The proposal is no less damaging for that. It will have dire effects on some groups.
The hon. Member for Birmingham, Selly Oak, (Mr. Beaumont-Dark) made a telling point when he asked why the Government should penalise people when they were at their most vulnerable, in the first six months of unemployment and find it most difficult to cope with repayments.
What about the disincentive effect, on which the Government have not provided an answer? If assistance is to be available only for 50 per cent. of the mortgage interest in the first six months, anyone who has gone

through those first six months will then qualify for the full amount. They will find it difficult to consider taking an insecure job because if they lose the job they will, once again, have to cope with 50 per cent. of the mortgage interest repayments for six months. The disincentive is clear for those who have been unemployed for six months and resume work because subsequently they might risk having to pay the 50 per cent. mortgage interest repayments.
What happens if a building society decides not to reschedule the debt? That might happen if little equity is outstanding on the property. That would create homelessness. The figures are telling. In 1979, a total of 4 per cent. of those accepted as being homeless by local authorities were homeless as a result of mortgage arrears. Last year that figure had risen to 10 per cent. — the highest on record. Does it make sense to risk increasing the numbers at risk of homelessness by withdrawing assistance?
What about others at risk, such as single parents? According to the latest figures, about 35,000 people are in that position. In my experience, that group most often face the most acute problems early in their claim for supplementary benefit, usually after the breakdown of the marriage or the relationship and when there is a sudden loss of family income. This means risking losing the family home and, becoming homeless.
Many advice agencies concentrating their help on such people know how important it is to get in at the earliest possible moment and to discuss with the building society the possibility of a remortgage if it is necessary to buy up the other party's equity to keep the wife and children in the matrimonial home. The loss of 50 per cent. of the mortgage interest in the first six months could be a critical factor which prejudices the prospects of a successful negotiation. Finances in such cases are often finely balanced. People in that position are most likely to be penalised by the proposal. Homelessness might be intensified specifically by the Government's proposal.
The Minister's response is threadbare. I hope that it was not intentional, but the Minister misled the House in saying that the taxpayer was meeting the full cost of people acquiring an appreciating asset. The truth is that supplementary benefit meets only interest payments. A safeguard is not very expensive, but it meets an important social need.
If the Government are looking for equity, they have a clear alternative which will ensure that proper help goes to home owners. Will the Minister accept that his case is threadbare? Instead of trying to push this fag-end of a proposal, which has been watered down in the face of enormous criticism, will he recognise that there is no support for it? The proposal is widely condemned and ill-considered and will cause hardship. Will the Minister accept that and withdraw gracefully, instead of stubbornly trying to push through a proposal which is so widely condemned?

Mr. Keith Raffan: I do not share the expertise on these matters of the hon. Member for Fulham (Mr. Raynsford), but I know how the measure will affect large numbers of people in my constituency. As I said in an intervention, unemployment in Delyn is high.
I have considerable respect for the Minister. I say that although I will he critical of the measure and of his speech.
Hon. Members on all sides share that respect. Few Ministers have to write more letters or have to answer for more. The same can be said of his colleague on the Front Bench, my hon. Friend the Under-Secretary of State for Health and Social Security.
I did not find my hon. Friend's speech convincing. It was a south of England speech. I do not mean to be rude by that. The Minister put emphasis on the short-term unemployed and said that most of the unemployed would find jobs within six months. How do we know that a person will find a job within a certain period? The Minister's constituency is in Essex, and the Under-Secretary's constituency is also in south-east England. The unemployed there have a much better chance of finding a job within six months than my constituents who live in the north, in the industrial and economic front line. I am not digressing. That is crucial to my criticism of the measure.
My constituency has suffered massive structural unemployment for the last 15 years because of its over-dependence on two industries — steel and textiles. Courtaulds employed 7,500 men and women in my constituency 15 years ago. Now it employs only 150 and their jobs are hanging by a thread. The Courtaulds plants were concentrated round Flint and Holywell so male unemployment there is 41 per cent. My constituency therefore has a higher proportion of long-term unemployed.
My constituents cannot sell their houses because so many are trying to sell their houses. The housing market is non-existent. My constituents who are out of work are desperately trying to find jobs. At my surgery in the last month I heard from a man who managed to find a job in Weston-super-Mare. He travels from there to his home in my constituency every weekend. He has to leave his wife and family in Holywell because he cannot sell his house. Another man has to travel equally far to Dumfries and he is in exactly the same position.
Last year Courtaulds' biggest remaining factory, at Greenfield, closed with the loss of 600 jobs, 200 jobs having been lost at the same factory six months earlier. The borough council, which is by no means Labour-dominated, stated to the Select Committee on Welsh Affairs, which held an inquiry into the closure at Flint —and it was no exaggeration—that any man who was out of work and over 35 years of age at the time in my constituency was unlikely ever to work again.
We are working hard in my constituency to prove that statement pessimistic. The Welsh Office, the Welsh Development Agency and Delyn borough council—we are all working together to create jobs. The Government could not have done more than they have by giving us the highest level of development area status, by designating Delyn an enterprise zone, and backing it with £8 million. That has created what the chief executive of the council has called
the most attractive industrial location in Wales.
We are creating jobs, but in our area, as in many other areas, they are mostly female jobs. In the presence of the hon. Member for Derby, South (Mrs. Beckett) and my hon. Friend the Member for Derbyshire, South (Mrs. Currie), I hasten to say that I am not against creating female jobs. However, the most economically active women tend to be the wives of employed men, so we are

not spreading incomes into unemployed households but doubling incomes in households where one person already has work.
No Government could have done more for north-east Wales than this Government. They have done far more than the last Labour Government, whose response was a worthless wringing of hands while factories closed. Unemployment in my constituency did not start on that day in 1979 that my right hon. Friend the Prime Minister crossed the threshold of No. 10 Downing street. Indeed, the massive Courtaulds redundancies and the first of the Shotton redundancies occurred under the last Labour Government, who did nothing. Yet all the good this Government have done is, at least in part, being undone by this measure.
Mr. hon. Friend the Minister said that part of the reasoning behind the measure was to reduce the inequity in the treatment between home owners on supplementary benefit and those in work but on low incomes. The low earners in my constituency have no ill feeling towards the unemployed who are receiving help; indeed, there is a great deal of sympathy. All those people that I have mentioned in my constituency, especially in Flint and Hollywell, are on low incomes, and most of them say of the unemployed, "There but for the grace of God go I."
I do not understand how we can talk of equity and inequity when we are not comparing like with like. Those who are out of work through no fault of their own cannot be compared with those who are fortunate enough to have jobs. I as a taxpayer, and the vast majority of taxpayers in my constituency who see at first hand the ravages of unemployment—not only financial, but psychological— would gladly contribute to help those who have the misfortune to be out of work. We do not want to deal them another blow at the very time when they are trying to find new work.
It has been said that, as the measure applies only to the first six months, the unemployed can use their redundancy payments to see them through that difficult period. Redundancy payments for low earners are minimal, especially for those who worked for Courtaulds. Even those who had been employed for 30 or 35 years received negligible payments—between £5,000 and £6,000. I have been very critical of that. We should not eat into those redundancy payments for living costs when they could be used to help somebody set himself up in his own business.

Mr. Newton: Anyone with a redundancy payment of £5,000 or £6,000 would be ruled out of supplementary benefit by the capital rule, so would receive no help.

Mr. Raffan: I know that is so, but how long does such a small redundancy payment last? It can only be a short time for many of my constituents, because they have overdrafts and considerable costs. I can assure my hon. Friend that the vast majority of my constituents will not be outside supplementary benefit, but very much dependent on it.
This measure discriminates against the hardest hit areas of the country where many of those out of work are long-term unemployed. It is not simply a financial blow; it is a psychological blow just at the crucial time when somebody is first experiencing the hitter shock of being out of work. It can only increase their anxiety and make it more difficult for them to adapt to the reality of being out of work. People in that position come to my surgery week


after week. We simply cannot do this to them. Just when they are at their most vulnerable, they are to be dealt another blow that can only increase their anxiety.
The measure perpetuates an impression — a wholly wrong and unfair impression—that the Government are creating two nations, the north and the south. We want to destroy that impression; indeed, we must destroy it in the coming months, not only because it is morally right to do so but because I and many of my hon. Friends will not be here after the next election if it is not destroyed. My hon. Friend the Minister will not be a Minister, but will find himself sitting on the Opposition Benches.
We are beginning to get across to the country a great deal of the good that we are doing. I know how much good the Government are doing in my constituency. My constituents have seen three of our four community hospitals visibly transformed during the past seven years, so they know that a great deal of money has been spent on them. The Government care, and my constituents realise that we have put that caring into practice through resources, albeit carefully allocated and spent.
We must destroy the unfair impression that the Government are creating two nations. No Government have done more in Delyn to create jobs since it first began to suffer massive structural unemployment 15 years ago. However, much of that good will be undone by this measure. In Lord Woolton's famous words, we must show that we not only cope, we care. Of course we must be careful, efficient, cost-effective administrators of not the Government, but the taxpayers', money. But we must also be compassionate, caring spenders of that money.
I implore my hon. Friend the Minister to think well and wisely about this measure. The money it would save would be a minute fraction of what we would lose in credibility as a Government and as a party. We are a Government who genuinely care, and I beg my hon. Friend not to throw away all the good that he and his colleagues have done. I hope that he will pick up this banana skin before we slip on it. He would he one of the first Ministers to do that, and it would be to his great credit. I hope that he will withdraw this measure as soon as possible.

Dr. Norman A. Godman: I shall speak briefly, even though I represent a constituency with scandalously high unemployment. Currently, male unemployment in the Greenock travel-to-work area is 26 per cent. That is an official figure, not one that I have fiddled or concocted. It was given to me yesterday by the assistant manager of the jobcentre in Greenock.
Like the hon. Member for Delyn (Mr. Raffan), I am deeply concerned about the way in which this paltry measure will affect my constituents. My hon. Friend the Member for Fulham (Mr. Raynsford) said that it was less than extreme, but I think it will exacerbate the problems faced by people at the dreadful moment when they are put out of work. It will especially affect those who do not receive large redundancy or severance payments.
Like the hon. Member for Delyn, I, too, can give a litany of companies that are in decline in my constituency. People are being dismissed each month. During the time that I have represented Greenock and Port Glasgow, the work force of Scott Lithgow has shrunk from 5,000-plus to about 1,400. That company is building one rig for Britoil, which is to he launched in about one month. When

the fitting out is completed at the tail end of the year, the 1,400 work force faces dismissal. That is the sort of problem that one has to face in representing constituents in these worrying circumstances.
Many of the 1,400 are managers, designers and naval architects. I am talking not only about the low-paid shipyard worker. If such a man is 40 years or older, he Will have experienced varying periods of unemployment, especially on the lower Clyde. Regrettably, that is a way of life for him. I am talking also about people who have purchased homes outwith my community, in places such as Kilmacolm, Wemyss Bay and Inverkip, and who are facing the threat of unemployment within the next few months. My plea to the Minister is to withdraw his horrible proposal.
Other industrial organisations in my constituency are facing bleak times. The last remaining marine engineering plant on the Clyde is situated in my constituency. If orders are not obtained within the next few months, employees of Clark Kincaid will be put out of work. Managers, design engineers and the men who build such first-class products will lose their jobs.
The cane sugar refining industry is in remorseless decline. There were 13 refineries, and now there is only one. The remaining refinery, owned by Tate and Lyle, is within my constituency.
Other industries are also experiencing remorseless decline. The result is that, in the space of a few years, there is male unemployment of 26 per cent. In my constituency, over 8,000 are unemployed. When Ministers recite the national unemployment statistics, they frequently fail to reinforce them by referring to their geographical distribution. I suspect that few Conservative Members—regrettably, only a few hon. Members are in the Chamber to discuss this important issue — have in their constituencies the level of unemployment that is to be found in mine.
Many of my constituents have been unemployed for over a year. Even when they obtain fresh employment, they face a short-term engagement. That is a growing phenomenon in Britain and the rest of the European Community. In the yard in my constituency which has only one rig to complete, hundreds of workers are on 13-week contracts. The contracts are extended only at the diktat of the employer — Trafalgar House. The employees do not have the power to extend their period of employment. Many men who have been taken on for 13 weeks — I accept that some have worked for much longer than that—are told that once that period has come to an end they can be dismissed following a week's notice with the usual severance pay agreements.
Those are some of the problems faced by those who live in the west of Scotland with its scandalously high unemployment. Scottish unemployment figures are higher than those for the rest of Great Britain. I think I am right in saying that the current unemployment rate for Great Britain as a whole is about 13·3 per cent., but it is 15·6 per cent. for Scotland and 18·5 per cent. in the Strathclyde regional area. As I have said, it is 26 per cent. or more in my constituency. These are the official figures.
The west of Scotland is experiencing a remorselessly continuing decline in its manufacturing base. The decline did not begin in 1979 and it would be stupid of me to suggest that it did. It could be argued that Scotland's manufacturing decline began in the 1920s. It was halted, perhaps, by the second world war, when manufacturing


activity remained on a plateau, and the break continued for a few years after the war. Despite the introduction into Scotland of new industries—what some call sunrise industries — the decline of the manufacturing base continues. It is not only my constituency with its traditional industries that is suffering a decline. I suspect that we shall never see the complete revival of the shipbuilding industry on the Clyde, or the marine engineering sector, no matter what Government come into office in two years' time. Naturally, I hope that the next Government will be a Labour Government, and that soon after that we shall have a Scottish Parliament. I would happily quit this place for such an assembly.
Whatever Administrations we have over the next decade, we shall not see a dramatic and radical revival of the shipbuilding and marine engineering industries. The epicentre for employment in those activities is in south-east Asia, and it will remain there for many decades to come, with perhaps some input by Brazil, China and elsewhere.
My hon. Friend the Member for Monklands, West (Mr. Clarke) can corroborate everything that I have said. His constituency has experienced the loss of Gartcosh with the decline of the steelmaking industry. The decline continues and people are worried about their prospects and those of their children.
The one Scottish solution that seems to have worked in the past — it has been used cynically by different Administrations — is emigration. That is one way in which Scotland has dealt with its unemployment. The little measure that we are discussing—as my hon. Friend the Member for Fulham has said, it is less than extreme—will worsen the problems facing my constituents and people in the west of Scotland and elsewhere.
Clydeside is not the only area that is suffering, and the traditional industries are not suffering alone. Even the new industries in Scotland have experienced unemployment. Last year, National Semiconductor in my constituency dismissed 400 employees. Not all of them received more than £3,000 in redundancy payments. Many of them are owner-occupiers. Some live in my constituency and others live in the constituency of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley). The electronics industry is not the only sector to have suffered during the hiatus. However, I am pleased to say that National Semiconductor is experiencing some form of recovery, and the management is honouring its promise to me that it would re-hire those who had been dismissed. Some were out of work for six or nine months and others are still out of work. As I have said, the problem exists in other industries.
The hon. Member for Delyn made a dramatic speech. Britoil recently announced that 400 employees would have to go. Again, they are not low-paid employees—manual workers living in council houses. Some are designers and senior managers. Forty of those employees, who worked at the head office in St. Vincent street, Glasgow, were given one hour's notice to clear their desks. That was no doubt because of the confidential nature of documents in their desks and, presumably, on their computers. Some people say that they received a reasonable pay-off by that massive oil company. However, they were given one hour's notice that they would be out of work. Some of those employees had moved to Scotland to work for Britoil.
The Grampion region benefits enormously from jobs created by the offshore oil industry. However, people in that area face the threat of unemployment. One employers' association which represents British interests in the offshore oil industry, BRIT — I hate acronyms and initials because I can never remember what they mean—said a few days ago that about 15,000 jobs within its member firms disappeared from the Scottish oil industry between February and June this year. That figure represents people with all kinds of occupational skills and knowledge, and with all kinds of mortgage obligations.
The hon. Member for Delyn warned the Government against creating two nations. I suggest that those two nations exist. Looking beyond national statistics, we see a pronounced geographical shape to unemployment in Britain. Despite the easy opportunity that is offered to every Back Bencher to produce solutions to the problems which appear to bedevil Ministers, I do not have the answers to these massive problems. I leave that to hon. Members representing the Scottish National party— on the occasions when they choose to visit the Chamber. Similarly, the Social Democrats are often noticeable by their absence when the House debates such issues.
On behalf of the people I represent, in these bleak economic times and the problems that they face, I ask the Minister to think again about this paltry measure. Its one effect will be to create added burdens and greater distress to people who are put out of work because of circumstances utterly outwith their control.

Mr. Peter Viggers: I listened with care to the hon. Member for Greenock and Port Glasgow (Dr. Godman), as I always do. I know the area of his constituency very well. I do not demur at all from his general comments about the difficulties in that area. I listened with care also to the remarks of my hon. Friend the Member for Delyn (Mr. Raffan). Both my hon. Friend and the hon. Gentleman sketched the problems of those who are unemployed for long periods and the problems of those who live in areas where there is high unemployment. If there is such difficulty in those areas, it is important that Government aid is focused most accurately on where it is most needed.
As the hon. Member for Oldham, West (Mr. Meacher), in his rather extreme and emotional speech, opened the debate, it is clear that the Opposition thought they were hitting at a soft target. There is no doubt that the measures have had a bad press, based on a rather simplistic and inadequate reading, in some cases, of the Government's proposals. If I were uncertain about the Government's proposals at the beginning of the debate, I am not uncertain about them now.
It is clear that there are differing views about the way in which the building societies in particular will cope with the proposals. Some hon. Members think that the building societies will allow the interest to be rolled up and accumulated as part of the capital sum of the outstanding debt. I suspect that that will be the case. If that is so, there is a strong argument in favour of the measures, because they would provide equity between the various parties involved in the mortgage and the outstanding loan. I shall return to this point later.
My first point is that there is no doubt that some families are better off out of work than in work. I have never criticised the shirkers and scroungers—those who


take advantage of unemployment benefit. I believe that the number of genuine scroungers and shirkers is small. They become known quite quickly to their neighbours. I believe that the overwhelming majority of people who are out of work desperately want to find a job. I reserve my anger for Members of Parliament who allow a system to continue which allows people to he better off out of work than in work.
I invite my colleagues to consider the position of the head of a family who must face the problem and decide whether to take a job and a cut in income, which will damage his family, or to stay out of work. This is a dilemma in which the House of Commons should not have put anyone. It is wrong that hon. Members should have legislated so that some people are better off out of work than they are in work. It is interesting to note that the Opposition have not commented on the specific points made by my hon. Friend the Minister. I think that they owe us their comments and views on a system which allows some people to be better off out of work than they are in work.
Secondly, my hon. Friend the Minister gave an example of a household with an average mortgage of £16,000, whose income out of work was appreciably higher than that of a family in work with an income of £80 to £120 a week. Examples have been given of the more deprived areas of the United Kingdom. I shall give an example of the position at the other end of the scale. A married man with three children, and the maximum mortgage allowable for tax relief of £30,000, is better off unemployed unless he earns about £180 a week. When the inevitable costs of travelling to work, clothing, lunches, and so on, are taken into account, he is better off unemployed unless he earns about £200 a week —£10,000 a year. That is a scandal with which any Government should cope.
My third point—I echo those made by the Minister — is that there should be a fair balance between the employed and the unemployed, home owners and tenants, and Government and lending organisations. In maintaining a fair balance, there is a limit to which adjustment can be made by improving benefits. Sometimes there is a point at which existing benefits, when they have grown out of balance, need to be reviewed and perhaps reduced. If help is to be focused on those most in need, we should review financial aid where it is not best spent.
My fourth point is that house ownership has been and continues to be an excellent investment. This year house prices are expected to increase in value by about 10 per cent., compared with inflation of about 3 per cent.

Mr. Raffan: Investment in housing may be a good investment in my hon. Friend's constituency, but I assure him that it is not in mine. In my constituency, the house market is at best static and at worst declining. As I said earlier—this is true of all areas where there is a high level of long-term unemployment — everyone wants to sell his house so that he can try to find a job in another part of the country. Therefore, housing is not a good investment in places such as my constituency which are the hardest hit.

Mr. Viggers: My hon. Friend has made a fair point, but it is fair to say also that in most parts of the United Kingdom housing has been a good investment. Of course there are exceptions, but the general rule, which applies more in the south-east than in most parts of the United

Kingdom, is that housing is a good investment. People receiving assistance with their interest payments should bear in mind that, normally, investment in housing is a good investment.
Fifthly, the Government propose that half the mortgage interest payments will be met for the first six months for claimants under 60. It is important to stress that there will be full protection after the six months for the long-term unemployed, that there will be full protection for those over 60 and that there will be considerable protection for the 90,000 people who will be affected by the proposals. The case has been made for consultation by the Social Security Advisory Committee on the Government's points. I therefore support the Government's view.

Mr. Ken Weetch: Make no mistake, this measure is bitterly resented throughout Britain. I want to refer to information from my constituency. I remind the Minister of his comments in a press release issued by his Department:
Our aim is to strike a fair and reasonable balance between the borrower, the lender and the taxpayer. We do not think this is achieved by the present arrangements which will enable all mortgage interest payments to be met immediately, however short the period of benefit.
In certain circumstances, that is not accurate. This is a confidence trick played on the person who is not sharp enough to reschedule his debt with the building society. The press release states:
In future, one half rather than the whole of mortgage interest should be met for claimants under 60 who are in receipt of benefit for only a short time or during the first six months of a longer period on benefit. After this period the interest would, as now, be met in full.
If a man who is suddenly out of work immediately sees the building society and has his interest payments rescheduled until a later period so that the Government pick up the arrears, he will not be out of pocket. If the debt is rescheduled, it is a disincentive for him to go back to work because, if he does, his arrears will not be refunded. The Government have spent a long time talking about disincentives. With the stroke of a pen, this scheme has created another disincentive, through mortgage interest payments.
There are other strange aspects to the measure. The Minister said that he was thinking of people on low incomes and aiming for a fairer distribution of the burden. The hon. Gentleman should not have distinguished betwen one low income and another. If he was looking for money, he should have considered mortgage interest tax relief, which is paid willy-nilly to those paying higher taxes. Mortgage interest tax relief is structured so that the more expensive the house one buys and the higher one's income, the higher the mortgage interest tax relief. In 1986, that is nearly £5 billion. If the Minister were looking for a section of the community to bear the brunt of this measure, he should have looked to those who were a little more fortunate than people who have been flung into unemployment.
This measure is bitterly resented, and I am surprised that it is associated with the Minister for Social Security. Many Labour Members regard him as one of the most knowledgeable and compassionate of Members on the Government Benches. But the fact is that this is the Treasury talking, not the Department of Health and Social Security.
The Government have incurred political unpopularity over this measure. I am in the political business to argue against them, but I never wanted to do it in this way. Unemployment is a financial and psychological blow. It is a great shame that when a man becomes unemployed, he learns that he will lace penalties with his mortgage interest repayments. That is difficult to bear.
The Building Societies Association, among others, has pointed to the increasing length of the list of people in mortgage arrears. This is becoming a serious problem. The Government are seeking also to extend owner-occupation. I am in full agreement with that. At present, 65 per cent. of people own their own houses. If the Government wish to pursue that policy, why on earth do they penalise the least fortunate owner-occupiers who happen to fall out of work? This is an inequitable policy, especially as the money could have been taken from elsewhere.
We all know that the Minister has to be hard-headed with a limited amount of money. He has a scale of priorities; he has to judge between this and that. But this decision is wrong. It is resented and, politically, it will cost the Government. It penalises the person who becomes unemployed and does not know enough to go to the building society to get his debt rescheduled so that, if he remains unemployed, the bill can he picked up later by the Treasury. The measure penalises not only the unemployed but the least knowledgeable. It is a bitter blow for some people. It means kicking someone in the teeth when he is already on the floor. The Minister's explanations on the radio and elsewhere are not credible—not because the hon. Gentleman cannot argue the case well enough but because he has a deplorable case to argue. He should take it away and think again.

Mrs. Margaret Beckett: We listened with great interest for the Minister's defence of these proposals. I say "for" rather than "to" because, as my hon. Friend the Member for Ipswich (Mr. Weetch) has just said, the defence was somewhat lacking. The hon. Gentleman complained that the Government have been attacked for secrecy. I know that the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) expressed concern at some of the details of the proposals. However, on the whole, the Opposition are not complaining about secrecy, although we know that the Prime Minister made a spirited attempt to run away from the timing of the proposals, if not from the proposals themselves. We object to the proposals as such because they are unjust, immoral, short-sighted and utterly nasty.
The proposals are being introduced against a background in which homelessness is already increasing sharply because of unemployment, especially in the past year. Hon. Members have given various statistics in the debate, and I want to remind the House of only two.
Homelessness through mortgage default is now five times greater than it was when the Government came to power in 1979; and in the last year alone mortgage defaults rose by 50 per cent. and repossessions, according to figures from the National Consumer Council, went up from 3,000 a year to 11,000. That is nearly a 300 per cent. increase in repossession. Therefore, it is extraordinary that, against that background of already increasing homelessness, the

Government have decided that they are giving too much help with mortgage interest payments to the most vulnerable in our society.
Many hon. Members have already expressed their awareness—I was pleased to see it happening on both sides — that there is already desperate anxiety among many unemployed. There is substantial evidence from the United States of America and here of the destructive effects to health of stress due to unemployment and of the increase in suicides that follows when unemployment levels rise substantially. If that is true and can be demonstrated now while greater help is available, the problems are bound to be exacerbated by these proposals. Indeed, it is hard to imagine proposals more destructive of people's security or more inclined to make them suffer substantial increases in stress than the justified fear of losing their homes.
Even now, when the Government's payments meet interest, although not the capital repayments, as a number of hon. Members have already pointed out, losing their home is the greatest anxiety for many home owners. The Government's policy inspectorate, which, as the Minister will know, has done a survey of a number of owner-occupiers, found that although many of the people it interviewed were good money managers—we are not talking about the feckless or incompetent — they all expressed the fear now of being unable to keep up their mortgage repayments and often went without other essentials, including replacement clothing, to do so. That point was made by my right hon. Friend the Member for Halton (Mr. Oakes) in his admirable speech, and it has come through strongly from the study. I repeat that that is the position now, before the Government make this further attack on the unemployed.
The Building Societies Association, in its 1985 report, referring to the existing payment, said:
If this benefit had not existed the rise in unemployment would have led to a much greater increase in arrears and possessions.
That is against a background in which, as we have already heard, the increase has already been substantial.
The Government, in their amendment, claim that this proposal has been introduced not just to make savings —which, as the hon. Member for Cardiff, North (Mr. Jones) rightly said, would be wholly inadequate justification for such a proposal—but because there is a need for balance and fairness between the treatment of one group and another in society, especially between the treatment of the low paid and the unemployed. The Government imply in what they have said that these proposals are part of the way to encourage people out of unemployment, as well as indicating, as I have said, that there is unfair treatment of home owners in low paid work compared with those on supplementary benefit.
As several hon. Members have pointed out, the Government are creating a new disincentive for people to go back to work. The Minister said that at present most unemployment is short term. It will not be in future—at least certainly not when people catch on to the implications in these proposals. Whether people are looking at short-term, part-time or low-paid jobs, it will not be in their interests to go back to work before they have been unemployed for six months. It certainly will not be in their interest to take short-term or insecure jobs because, if they become unemployed again, they will have to start building up that period of qualification all over


again if the work they took was for anything longer than eight weeks. It will not be in their interest to take part-time work because they may deprive themselves of entitlement to benefit and of building up their six months.
It certainly will not be in their interest to take low-paid work at or near the end of their six months because, as my hon. Friend the Member for Ipswich pointed out with admirable clarity, it is only if they stay unemployed for longer than six months that the interest that they might have succeeded in getting deferred will be paid. Therefore, as I have said, it creates a disincentive for people to take any kind of part-time employment which might put them beyond the income level of their entitlement to supplementary benefit. In a sense, it creates a disincentive for home ownership as such because there are bound to be people who, simply through the loss of this mortgage interest entitlement, will be put outside the income range in which they might be entitled to supplementary benefit.
It is an extraordinary position, and it is even more extraordinary that the Minister should choose this debate to boast about what the Government have done to promote the sale of council houses. It is extraordinary that the Government, who have promoted such sales, should now he putting people who may have bought their council houses and may even now be struggling to meet the mortgage repayments — a widespread phenomenon, as Opposition Members are well aware—and who become unemployed, in a position where, under these proposals, they could become homeless because they listened to a Government who told them that the best way to secure the future for their family was to buy their own home. A threat will now be hanging over them that they would not have faced if they had failed to listen to the Government and had remained tenants.
Only the other day the Minister for Housing, Urban Affairs and Construction said that the Government were not anxious — perhaps I should say "any more", although I do not think that he did—to encourage the low-paid to buy their own homes. It is a pity that they did not mention it earlier. It is certainly not the impression that many people in the country have had.
Those who, for whatever reason — perhaps because one of the family has a part-time job or because they lose their entitlement to the mortgage interest payment —lose all entitlement to supplementary benefit as such are bound to find that they will never, even after six months, qualify for this payment. They are almost bound to end up either giving up any part-time job, if they have one, or be in greater danger of becoming homeless.
The Minister did not mention the possibility of people insuring against the loss of employment. I was a little surprised because that has featured quite strongly in the other defences that the Government have made of this proposal. I listened with great care to what the lion. Member for Derbyshire, South (Mrs. Currie) said about the availability of such schemes, the cost, and so on. I would not question the information that she has gathered. However, I also have information from people who, rather than going to the societies to ask what is offered, have tried as a family unit to obtain such insurance in the recent past.
I must tell the hon. Lady that all those who have spoken to me and some who have written have said that in practice it is not only much more difficult than she suggested but more costly. A simple hut, I would have thought, obvious point is that those for whom the threat is greatest and those who need the insurance most are those who are least

likely to be able to get it, or afford it, because they are bad risks. Insurance companies do not like taking on people who are a had risk.
My hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) asked a pertinent question. I do not blame the hon. Lady for not having the answer to it. It may be that the insurance companies could not answer it. He asked whether there were differential payments in different parts of the country. I am sure that all hon. Members will recognise that where unemployment is high such insurance is likely to be unobtainable or, in effect, unobtainable because it is so expensive.
I recognise that the hon. Member for Derbyshire, South had a different proposal. She proposed that everyone should have compulsory insurance for health, redundancy, and so on, as a package. I was under the impression that we already had such a system. We call it national insurance. I can see no reason to compel people to take out further private insurance for something that they are already paying the Government to provide.
The Minister said that the Government would consider the outcome of the consultations being undertaken with the Social Security Advisory Committee. Of course, he did not remind the House that we have had two sets of consultations already. The Government consulted the building societies and a whole range of other institutions on the proposals as drafted in the Green Paper and on the proposals as drafted in the White Paper. To the best of my recollection, they got no support from any quarter, not even from the Institute of Directors, which has been known to support one or two of the Government's wilder proposals.
Apart from consultations on those specific measures, which do not seem to us to have brought the Government any comfort, earlier they consulted several eminent persons, all of the Government's own choice and of their own political persuasion, about the pattern of housing support, as my hon. Friend the Member for Fulham (Mr. Raynsford) and other hon. Members mentioned. In the housing benefit review, the Government's hand-picked advisers addressed their minds to precisely the matter that so troubles the Government, to which they refer in the amendment the balance between support for those who are in low-paid work and those who are unemployed. The housing benefit review team proposed that the right way to deal with the problem was to make home owners eligible for standard housing benefit. Therefore, we have had two processes of consultation in the past year, both of which, so far, the Government have chosen to ignore.
As has been amply demonstrated by hon. Members on both sides of the House, the proposals are made against a background in which homelessness, due to inability to pay mortgages, is already rising sharply. They are also made against the more general background, which is perhaps less easily understood by the public, of an attack on the income and an increase in the problems of the unemployed. This matter may soon be debated in the House. A reduction is being made in the single payments available to the unemployed. Ultimately they will be replaced by the social fund. That will mean a reduction in income available to the unemployed. The costs that they are to meet from their reduced income are to rise, particularly because of the Government's proposal in the Social Security Bill to make everyone on supplementary benefit meet 20 per cent. of their rates and water rates.


That proposal was rejected only this week by another place, but we hear that the Prime Minister is determined to reinstate it.
The penalties of unemployment are also due to be increased. In the final days of consideration of the Social Security Bill in Committee, the Government introduced a proposal that if someone might have made himself voluntarily unemployed, or might not be seeking work with sufficient enthusiasm, his benefit could be reduced — not for six weeks, as now, but for a full 13 weeks. The Government clearly said that they proposed measures with increased questioning so that they could find out what action people were taking to find work, even in areas where unemployment is sky-high.
Before the proposals came forward in this form, we were already concerned that the package, particularly the last elements to which I referred, might mean that people were pursued and attempts made to force them to take jobs, even low-paid jobs, and even there the money coming in would not be adequate to support their families. If the family is carrying a further burden of debt, incurred because the benefit paid under the proposals is reduced, there is a great danger that those people may be leant on and pushed by Government officials to take action which might increase the danger of them losing their home because of the growing burden of debt compared with a potentially inadequate income.
Despite growing evidence that the Government are dominated by those whose views would not have been out of place in the Tory Governments of the 1930s, I have noticed that Ministers become upset when we in the Labour party draw on the experience and history of our families and, in particular, of the Labour movement. But it is still important and relevant to say to the Government at the conclusion of this debate that part of what made the proposal that is usually described as the means test so hated was that it took away from people the few assets that they had managed to accrue, often after struggling throughout their working life, and that they knew perfectly well they could never replace. It made families feel that all their work, all their endeavour, had gone for nothing, because the few achievements that had been gained were gone for ever.
The way in which the memory of the means test has lingered on is testimony to the bitterness of that experience. I know that hon. Members, particularly Opposition Members, can testify to that strongly from the experience of their families. It is extraordinary that this Government want to revive that memory and bitterness. A famous quotation tells us that those whom the gods would destroy they first send mad. Clearly the gods, like the country, have turned against the Government.

The Parliamentary Under-Secretary of State for Health and Social Security (Mr. John Major): I shall endeavour to bring some sanity to the debate. We have had an excellent debate of some heat and passion. I have no objections to that. The hon. Member for Derby, South (Mrs. Beckett), in summing up the Opposition's case, did so crisply and aptly, as she so frequently does. One or two of the speeches have been outstanding. I shall endeavour to respond to as many of the points made as possible.
I know that the hon. Member for Oldham, West (Mr. Meacher) must leave, for understandable reasons, which he has explained to me, so let me say a word or so about his opening speech. I listened to it with an unanticipated admiration. My fascination was not so much with the content of the hon. Gentleman's argument or, indeed, with the motion, to which I shall refer; nor was it with his delivery, lucid and impassioned as it was, and as it so frequently is. My fascination was born out of sheer admiration for the absolute brass-necked effrontery of the motion on this subject from that source. It is effrontery because, as my hon. Friend the Minister of State set out at the commencement of the debate, our proposals are still at the consultation stage. The Social Security Advisory Committee is still considering them. No report has yet been received. No consultation has yet been considered. No final decisions have yet been taken—[Interruption.] The hon. Member for Walsall, North (Mr. Winnick) occasionally engages his mouth before his thought processes. He would be wise to wait a second or two.
On a former occasion, when the hon. Member for Oldham, West issued his Green Paper on mortgage interest, he was concerned that he was criticised for what were consultation proposals, and said so loudly and frequently to the press. I say that the hon. Gentleman's effrontery is brass-necked because—I put it kindly—the hon. Gentleman has a chequered history on the subject of mortgage interest, and the concept of him, with his record, as the saviour of home owners, is as absurd a proposition as the House can swallow, even towards the end of a long Session. However, I shall not be cruel to the hon. Gentleman and dwell on that, not least because I wish to refer specifically to some of the important points that were made in the debate by him and others.
The right hon. Member for Halton (Mr. Oakes) spoke early in the debate with all the experience of a vice-president of the Building Societies Association. I was particularly grateful to him for the acknowledgment that the building societies deal sensitively with borrowers facing short-term difficulties. I am happy to acknowledge that that is traditionally the case, and I hope and expect that the building societies will continue to do so in future the underlying concern of the right hon. Gentleman—I hope that I do not misstate it — and of other hon. Members, including the hon. Member for Oldham, West, my hon. Friend the Member for Cardiff, North (Mr. Jones) and the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), was the danger of foreclosure as a result of arrears. I entirely accept—it is impossible to deny it—that foreclosure inevitably causes great distress where it occurs.
The right hon. Gentleman, better perhaps than anyone else in the House, will know that foreclosure is the last option that the lenders wish to pursue. It is not an early instinct, but the last option. There are many criteria to be considered before that sad decision is reached — how much, if any, equity the individual possesses in the property, whether the difficulty is likely to be long-term, and whether there are other debt problems. All those are relevant points that would need to be seriously considered by the lender before there was any suggestion of foreclosure. I suggest that the same principle would apply where the lender is not a building society, but perhaps some of the later arrivals on the lending scene — the local authorities, which would lend to people who had purchased local authority property, and banks.
I do not accept, in the fashion that it has been advanced from time to time this afternoon, the suggestion that the proposed change sent to the Social Security Advisory Committee, would, of its own volition given its nature and scale, materially accelerate foreclosure. Although we may quibble about the figures on the fringes, there is little doubt that, broadly, the average interest lost for a supplementary claimant unemployed for the full six months would be about £200. That addition to the capital debt, when it is known that after a six-month period the interest would again be met in full, seems unlikely to trigger foreclosure of its own volition. The observation made by the right hon. Member for Halton about the building societies lends some force to that argument.

Mr. Raynsford: Will the Minister give way?

Mr. Major: I hope that the hon. Gentleman will forgive me if I do not give way. He contributed to the debate and there are many points that I should like to cover. Some of the comments that I should like to cover are his.
That argument is also strengthened in the light of the specific comments by the Building Societies Association to the effect that it would handle any change in arrangements sympathetically and would continue with the basic aim of keeping as many people in home ownership as possible.
The right hon. Member for Halton also mentioned another important matter. He referred to the £1·85 weekly addition to supplementary benefit for repairs and insurance. I can reassure the right hon. Gentleman by saying that that sum may be increased where the cost of repairs and insurance exceeds that figure, provided that it is reasonable in all the circumstances to do that. We would expect that frequently to he the case.
My hon. Friend the Member for Cardiff, North expressed his concerns trenchantly. I shall study with care the reservations that he expressed. They were echoed by other hon. Members. In the meantime, as his speech was unique in this respect, perhaps I may welcome his acknowledgement of the minor improvements proposed, and specifically his acknowledgement of the proposed special disregard of income from mortgage protection policies to meet the balance of mortgage payments. It was refreshing to hear that minor change acknowledged, for it was in danger of being swamped in the criticism that emerged elsewhere in the debate.
My hon. Friend the Member for Delyn (Mr. Raffan), in an excellent speech, spoke with passion and clarity about his concerns. He referred to some of the observations made by my hon. Friend the Minister for Social Security, who was trying to make the point that the measure was directed at the first six months on benefit. Everyone whose unemployment turns out to be long term, will, of course, have all the interest met after the six months, including the extra interest in arrears arising from the 50 per cent. limitation, which will have capitalised and added Lo the outstanding loan. Those whose unemployment is longer term will come, and will know that they will come, into full benefit and qualify for extra help with additional interest on the higher loan.
Therefore, I hope that people out of work will appreciate that and understand that 100 per cent. will become available if, sadly, they remain out of work after the full six months and that that will include the extra help with the interest, which may have been capitalised and which was not met during the first six months. I should

also like to assure my hon. Friend the Member for Delyn that, when the measure comes into operation it will affect new cases only, and not existing cases.
The hon. Member for Fulham (Mr. Faynsford), in a wide-ranging speech, referred to repossessions and arrears. I shall not bandy statistics with him, for we have done that before and I am wary of creating a tradition. However, we are in no sense complacent about arrears. I accept that for those in difficulties the problems can, self-evidently, be severe. The proportion of those in difficulties is very small and ought not to be over-exaggerated.

Mr. Raynsford: rose—

Mr. Major: Well over 99 per cent. of mortgages are not in arrears. It does not help the hon. Gentleman's argument or rational debate to paint an exaggerated picture of many people in severe difficulties. On the information available to me, that is not statistically the case.

Mr. Raynsford: I should like to correct the Minister. At the beginning of my speech I made the point that we were not talking about large numbers of people. The point that I tried to make—the statistics that I quoted illustrate this—is that there has been a serious increase in the proportion of arrears during the lifetime of the Government. In fact, there has been a sixfold increase. Although the numbers are not large in absolute terms, the trend is very worrying. The likely implication of the proposals is to make that trend worse. That is the main principle of the Opposition's criticism.

Mr. Major: I understand the hon. Gentleman's point. In no sense was I trying to misrepresent him. I was trying to place his point in the context of the facts as I understand them.
The hon. Gentleman also referred rather tantalisingly to the proposition of extending mortgage interest cover to housing benefit. He will know that that occurs in France, Germany, New Zealand and Switzerland. He will also know that none of those countries offer 100 per cent. cover, nor, I think — I shall have to check to he completely sure — do they provide the degree of protection that would be provided under the supplementary benefit proposals even were we to implement the proposals referred to the SSA C in their present form.
My hon. Friend the Member for Derbyshire, South (Mrs. Currie), with an arithmetical precision that is admirable, asked how the Government's figures added up. They did not seem to add up to my hon. Friend. I understand her confusion, but I can assure her that the calculations are correct. However, in the interests of brevity perhaps she will permit me to write to her with the detailed calculations, rather than deal with them at great length now.
Another matter which is relevant and which has run as a strand throughout the debate is the anxiety that lenders will be discouraged from pursuing low-cost home ownership initiatives. We hope that that will not be the case. The Government have welcomed the building societies' efforts in that area, and we recognise that they are helping people into home ownership who might otherwise have been unable to afford such ownership.
There is always an element of risk in operating at the lower end of the market. Any addition to that risk from our proposals will, in our judgment, be short-tern and apply to only a minority of cases. I must emphasise again


that when a borrower becomes unemployed and is in receipt of unemployment benefit, mortgage interest and interest on arrears will be fully covered after the six-month period. When unemployment is for less than six months, we believe that it will normally be possible to make arrangements for the recovery of arrears in the normal way. In the meantime, help will continue to be given with half the interest payments.
In order to put the matter into the proper context at the end of an emotional debate, I stress that we are considering an amount equal to three months' interest at most. There is, of course, also the problem of the mortgage interest trap, about which the Shelter Housing Aid Centre has made comments recently. I can assure the House that we will carefully examine this problem, which, to some extent, may appear to be inherent in any scheme to introduce a six-month qualifying period.
It is our preliminary judgment that the number of people who might be caught in the mortgage interest trap is minute. Throughout the country we believe that no more than 1,000 people will be affected. We will therefore need to balance carefully our desire to help with the legal and operational problems involved in dealing with changes of circumstances in the six-month period.
The thrust of the Opposition's charge has been that the Government are unfairly beastly to people whom we sought to encourage into home ownerhip. I do not accept that charge. It is inaccurate, and that has not been our intention. I must also say, even in the absence of the principal protagonist, the hon. Member for Oldham. West, that it is a colossal cheek for the Opposition to make that charge. They opposed the right to buy, and many of the people about whom they now claim to be concerned would never have become home owners without the right to buy.
The hon. Member for Oldham, West appeared to he keen to abolish either all or — as I do not wish to misrepresent him—part of mortgage interest tax relief, without which far fewer people would have become home owners. As recently as last evening, speaking from the Opposition Front Bench, the hon. Member for Bootle (Mr. Roberts) repeated yet again that it was wrong for taxpayers to receive income tax relief on mortgages up to £30,000. That is in flat contradiction to what has been said elsewhere as the official Opposition policy. The sooner the Opposition make their position utterly clear on that, the better.

Mr. Raynsford: We intend to limit it to the standard rate.

Mr. Major: The hon. Member for Fulham says that the Opposition will limit it to the standard rate. The hon. Member for Oldham, West had a different proposition, and the hon. Member for Bootle had yet a further proposition to make yesterday. There are more propositions from the Opposition on mortgage interest than there are defence policies from the alliance. The sooner we have an accurate assessment of the Opposition's stance, the better. We need no lectures from the Labour party on that.
The propositions that we referred to the advisory committee were not novel. They were well understood, they were trailed in the Green Paper and in the White

Paper and they were spoken about often. Nor are they final, for we await with interest the advisory committee's report on the draft regulations.
Moreover, I re-emphasise that our proposals apply only to the short term, with full benefit entitlement being restored after six months. They are modest proposals; they are certainly worth considering; they will bring equity of treatment between home owner and taxpayer and between those on low incomes, whether in or out of work.
Even under our proposals, we would have a better and more generous system than the Labour Government in New Zealand—

Mr. Derek Foster: rose in his place, and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 198, Noes 259.

Division No. 233]
[7 pm


AYES


Abse, Leo
Deakins, Eric


Adams, Allen (Paisley N)
Dewar, Donald


Alton, David
Dixon, Donald


Archer, Rt Hon Peter
Dormand, Jack


Ashdown, Paddy
Douglas, Dick


Ashley, Rt Hon Jack
Dover, Den


Ashton, Joe
Dubs, Alfred


Atkinson, N. (Tottenham)
Duffy, A. E. P.


Bagier, Gordon A. T.
Eadie, Alex


Banks, Tony (Newham NW)
Eastham, Ken


Barnett, Guy
Edwards, Bob (W'h'mpt'n SE)


Barron, Kevin
Ellis, Raymond


Beckett, Mrs Margaret
Evans, John (St. Helens N)


Beith, A. J.
Fatchett, Derek


Bell, Stuart
Faulds, Andrew


Benn, Rt Hon Tony
Field, Frank (Birkenhead)


Bennett, A. (Dent'n &amp; Red'sh)
Fields, T. (L'pool Broad Gn)


Bermingham, Gerald
Fisher, Mark


Bidwell, Sydney
Flannery, Martin


Blair, Anthony
Foot, Rt Hon Michael


Boothroyd, Miss Betty
Forrester, John


Boyes, Roland
Foster, Derek


Bray, Dr Jeremy
Foulkes, George


Brown, Gordon (D'f'mline E)
Fraser, J. (Norwood)


Brown, Hugh D. (Provan)
Freeson, Rt Hon Reginald


Brown, N. (N'c'tle-u-Tyne E)
Freud, Clement


Brown, Ron (E'burgh, Leith)
George, Bruce


Bruce, Malcolm
Gilbert, Rt Hon Dr John


Buchan, Norman
Godman, Dr Norman


Caborn, Richard
Gould, Bryan


Callaghan, Rt Hon J.
Gourlay, Harry


Callaghan, Jim (Heyw'd &amp; M)
Hamilton, James (M'well N)


Campbell, Ian
Hamilton, W. W. (Fife Central)


Campbell-Savours, Dale
Hancock, Michael


Carlile, Alexander (Montg'y)
Hardy, Peter


Carter-Jones, Lewis
Harman, Ms Harriet


Cartwright, John
Harrison, Rt Hon Walter


Clark, Dr David (S Shields)
Hart, Rt Hon Dame Judith


Clarke, Thomas
Hattersley, Rt Hon Roy


Clay, Robert
Heffer, Eric S.


Clelland, David Gordon
Hogg, N. (C'nauld &amp; Kilsyth)


Clwyd, Mrs Ann
Home Robertson, John


Cohen, Harry
Hoyle, Douglas


Conlan, Bernard
Hughes, Robert (Aberdeen N)


Cook, Frank (Stockton North)
Hughes, Roy (Newport East)


Cook, Robin F. (Livingston)
Hughes, Simon (Southwark)


Corbett, Robin
Hume, John


Corbyn, Jeremy
Janner, Hon Greville


Cox, Thomas (Tooting)
Jenkins, Rt Hon Roy (Hillh'd)


Craigen, J. M.
John, Brynmor


Crowther, Stan
Johnston, Sir Russell


Davies, Rt Hon Denzil (L'lli)
Jones, Barry (Alyn &amp; Deeside)


Davis, Terry (B'ham, H'ge H'I)
Kaufman, Rt Hon Gerald






Kinnock, Rt Hon Neil
Redmond, Martin


Kirkwood, Archy
Rees, Rt Hon M. (Leeds S)


Leadbitter, Ted
Richardson, Ms Jo


Leighton, Ronald
Roberts, Ernest (Hackney N)


Lewis, Ron (Carlisle)
Robertson, George


Lewis, Terence (Worsley)
Robinson, G. (Coventry NW)


Litherland, Robert
Rogers, Allan


Livsey, Richard
Ross, Ernest (Dundee W)


Lloyd, Tony (Stretford)
Ross, Stephen (Isle of Wight)


Lofthouse, Geoffrey
Rowlands, Ted


Loyden, Edward
Ryman, John


McCartney, Hugh
Sedgemore, Brian


McDonald, Dr Oonagh
Sheerman, Barry


McKelvey, William
Sheldon, Rt Hon R.


MacKenzie, Rt Hon Gregor
Shields, Mrs Elizabeth


McNamara, Kevin
Shore, Rt Hon Peter


McTaggart, Robert
Short, Ms Clare (Ladywood)


McWilliam, John
Short, Mrs R.(W'hampt'n NE)


Madden, Max
Silkin, Rt Hon J.


Marek, Dr John
Skinner, Dennis


Marshall, David (Shettleston)
Smith, C.(lsl'ton S &amp; F'bury)


Martin, Michael
Smith, Rt Hon J. (M'ds E)


Mason, Rt Hon Roy
Snape, Peter


Maxton, John
Soley, Clive


Maynard, Miss Joan
Spearing, Nigel


Meadowcroft, Michael
Steel, Rt Hon David


Michie, William
Stewart, Rt Hon D. (W Isles)


Mikardo, Ian
Stott, Roger


Miller, Dr M. S. (E Kilbride)
Strang, Gavin


Morris, Rt Hon A. (Wshawe)
Thompson, J. (Wansbeck)


Morris, Rt Hon J. (Aberavon)
Thome, Stan (Preston)


Nellist, David
Torney, Tom


Oakes, Rt Hon Gordon
Wallace, James


O'Brien, William
Wareing, Robert


O'Neill, Martin
Weetch, Ken


Orme, Rt Hon Stanley
Welsh, Michael


Owen, Rt Hon Dr David
White, James


Park, George
Wigley, Dafydd


Parry, Robert
Williams, Rt Hon A.


Patchett, Terry
Wilson. Gordon


Pavitt, Laurie
Winnick, David


Penhaligon, David
Woodall, Alec


Pike, Peter
Wrigglesworth, Ian


Powell, Raymond (Ogmore)
Young, David (Bolton SE)


Prescott, John



Radice, Giles
Tellers for the Ayes:


Randall, Stuart
Mr. Ron Davies and


Raynsford, Nick
Mr. Lawrence Cunliffe.


NOES


Adley, Robert
Bright, Graham


Aitken, Jonathan
Brinton, Tim


Alexander, Richard
Brown, M. (Brigg &amp; Cl'thpes)


Alison, Rt Hon Michael
Browne, John


Amery, Rt Hon Julian
Bryan, Sir Paul


Amess, David
Budgen, Nick


Arnold, Tom
Bulmer, Esmond


Ashby, David
Burt, Alistair


Aspinwall, Jack
Butler, Rt Hon Sir Adam


Atkins, Rt Hon Sir H.
Carlisle, John (Luton N)


Atkins, Robert (South Ribble)
Carlisle, Kenneth (Lincoln)


Atkinson, David (B'm'th E)
Carlisle, Rt Hon M. (Wton S)


Baker, Rt Hon K. (Mole Vall'y)
Carttiss, Michael


Baker, Nicholas (Dorset N)
Cash, William


Baldry, Tony
Chalker, Mrs Lynda


Banks, Robert (Harrogate)
Chapman, Sydney


Batiste, Spencer
Chope, Christopher


Bellingham, Henry
Churchill, W. S.


Bendall, Vivian
Clark, Hon A. (Plym'th S'n)


Benyon, William
Clark, Dr Michael (Rochford)


Biffen, Rt Hon John
Clark, Sir W. (Croydon S)


Biggs-Davison, Sir John
Clegg, Sir Walter


Blackburn, John
Cockeram, Eric


Blaker, Rt Hon Sir Peter
Colvin, Michael


Bonsor, Sir Nicholas
Conway, Derek


Boscawen, Hon Robert
Coombs, Simon


Bottomley, Peter
Cope, John


Bottomley, Mrs Virginia
Cormack, Patrick


Bowden, A. (Brighton K'to'n)
Corrie, John


Boyson, Dr Rhodes
Couchman, James





Cranborne, Viscount
King, Roger (B'ham N'field)


Critchley, Julian
Knight, Dame Jill (Edgbaston)


Currie, Mrs Edwina
Knowles, Michael


Dickens, Geoffrey
Knox, David


Dorrell, Stephen
Lawler, Geoffrey


Douglas-Hamilton, Lord J.
Lee, John (Pendle)


Dykes, Hugh
Leigh, Edward (Gainsbor'gh)


Edwards, Rt Hon N. (P'broke)
Lennox-Boyd, Hon Mark


Eggar, Tim
Lewis, Sir Kenneth (Stamf'd)


Emery, Sir Peter
Lightbown, David


Evennett, David
Lilley, Peter


Eyre, Sir Reginald
Lloyd, Sir Ian (Havant)


Fairbairn, Nicholas
Lloyd, Peter (Fareham)


Fallon, Michael
Lord, Michael


Farr, Sir John
Lyell, Nicholas


Favell, Anthony
McCurley, Mrs Anna


Fenner, Mrs Peggy
Macfarlane, Neil


Fletcher, Alexander
MacKay, Andrew (Berkshire)


Fookes, Miss Janet
MacKay, John (Argyll &amp; Bute)


Forman, Nigel
McLoughlin, Patrick


Forsyth, Michael (Stirling)
McNair-Wilson, M. (N'bury)


Forth, Eric
Madel, David


Fox, Sir Marcus
Major, John


Franks, Cecil
Malins, Humfrey


Fraser, Peter (Angus East)
Maples, John


Freeman, Roger
Marlow, Antony


Galley, Roy
Marshall, Michael (Arundel)


Gardner, Sir Edward (Fylde)
Mates, Michael


Garel-Jones, Tristan
Maude, Hon Francis


Glyn, Dr Alan
Mayhew, Sir Patrick


Goodhart, Sir Philip
Mellor, David


Goodlad, Alastair
Merchant. Piers


Gorst, John
Meyer, Sir Anthony


Gow, Ian
Miller, Hal (B'grove)


Gower, Sir Raymond
Mills, Iain (Meriden)


Grant, Sir Anthony
Mills, Sir Peter (West Devon)


Greenway, Harry
Miscampbell, Norman


Griffiths, Sir Eldon
Mitchell, David (Hants NW)


Griffiths, Peter (Portsm'th N)
Moate, Roger


Ground, Patrick
Montgomery, Sir Fergus


Grylls, Michael
Moore, Rt Hon John


Hamilton, Neil (Tatton)
Morris, M. (N'hampton S)


Hanley, Jeremy
Morrison, Hon P. (Chester)


Hannam, John
Moynihan. Hon C.


Hargreaves, Kenneth
Murphy, Christopher


Harvey, Robert
Neale, Gerrard


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, C. (High Peak)
Newton, Tony


Hawksley, Warren
Nicholls, Patrick


Hayes, J.
Morris, Steven


Hayhoe, Rt Hon Barney
Onslow, Cranley


Hayward, Robert
Oppenheim, Phillip


Heathcoat-Amory, David
Oppenheim, Rt Hon Mrs S.


Heddle, John
Osborn, Sir John


Henderson, Barry
Ottaway, Richard


Hickmet, Richard
Page, Richard (Herts SW)


Hicks, Robert
Parkinson, Rt Hon Cecil


Higgins, Rt Hon Terence L.
Patten, J. (Oxf W &amp; Abgdn)


Hind, Kenneth
Pattie, Geoffrey


Hirst, Michael
Pawsey, James


Hogg, Hon Douglas (Gr'th'm)
Peacock, Mrs Elizabeth


Holland, Sir Philip (Gedling)
Percival, Rt Hon Sir Ian


Hordern, Sir Peter
Portillo, Michael


Howarth, Alan (Stratf'd-on-A)
Powell, William (Corby)


Howarth, Gerald (Cannock)
Powley, John


Howell, Rt Hon D. (G'ldford)
Prentice, Rt Hon Reg


Hunt, David (Wirral W)
Price, Sir David


Hunt, John (Ravensbourne)
Proctor, K. Harvey


Hunter, Andrew
Raison, Rt Hon Timothy


Hurd, Rt Hon Douglas
Rees, Rt Hon Peter (Dover)


Jackson, Robert
Rhodes James, Robert


Jenkin, Rt Hon Patrick
Rhys Williams, Sir Brandon


Jessel, Toby
Ridley, Rt Hon Nicholas


Johnson Smith, Sir Geoffrey
Ridsdale, Sir Julian


Jones, Gwilym (Cardiff N)
Rifkind, Rt Hon Malcolm


Jones, Robert (Herts W)
Rippon, Rt Hon Geoffrey


Joseph, Rt Hon Sir Keith
Roberts, Wyn (Conwy)


Kellett-Bowman, Mrs Elaine
Roe, Mrs Marion


Kershaw, Sir Anthony
Rossi, Sir Hugh


Key, Robert
Rost, Peter






Sackville, Hon Thomas
Townsend, Cyril D. (B heath)


Sainsbury, Hon Timothy
Tracey, Richard


Shaw, Giles (Pudsey)
Twinn, Dr Ian


Shaw, Sir Michael (Scarb')
Vaughan, Sir Gerard


Shelton, William (Streatham)
Viggers, Peter


Shepherd, Richard (Aldridge)
Wakeham, Rt Hon John


Silvester, Fred
Walden, George


Skeet, Sir Trevor
Walker, Bill (T'side N)


Smith, Tim (Beaconsfield)
Waller, Gary


Speed, Keith
Warren, Kenneth


Spencer, Derek
Wells, Bowen (Hertford)


Spicer, Michael (S Worcs)
Wells, Sir John (Maidstone)


Stevens, Lewis (Nuneaton)
Wheeler, John


Stewart, Allan (Eastwood)
Wiggin, Jerry


Stewart, Andrew (Sherwood)
Winterton, Nicholas


Stokes, John
Wolfson, Mark


Tapsell, Sir Peter
Wood, Timothy


Taylor, John (Solihull)



Tebbit, Rt Hon Norman
Tellers for the Noes


Thompson, Donald (Calder V)
Mr. Tony Durant and


Thompson, Patrick (N'ich N)
Mr. Michael Neubert.


Thurnham, Peter

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House congratulates the Government on the success of its policies to encourage home ownership; recognises the need to achieve a proper balance between the responsibilities of the borrower, the lender and the tax payer, and greater fairness as between those on Supplementary Benefit for short periods and those in low paid employment; and notes the proposals to this end that the Government has put forward for consultation to the Social Security Advisory Committee.

Higher and Continuing Education

Mr. Giles Radice: I beg to move,
That this House notes the importance of higher education for the future of the country; deplores the cutbacks in the recurrent grant to universities; condemns the failure to provide adequate resources for the public sector for continuing education and for research; and calls upon Her Majesty's Government to open up higher education to a much wider group than ever before, including mature and part-time students.
I begin by making what I hope are relatively non-controversial statements about higher education. I think that all right hon. and hon. Members agree that higher education is important for individual men and women because it builds up their information and knowledge; it develops their critical faculties and thinking powers; it encourages their interest and involvement in society and politics; and it enables them to obtain better paid and more interesting jobs.
However, higher education is important not just for individuals but for the community as a whole. Not only does it help to provide society with the pool of knowledge and scholarship that is so vital to our culture but also, as the CBI recently reminded the Government, it supplies industry with the skilled graduates and the scientific and technological research that it so desperately needs if it is to survive and prosper. Higher education trains the teachers for our schools, including those who teach the vital subjects of science and mathematics; so what happens to higher education must be a matter of national concern.
I stress also the importance of continuing education. Increasingly, as both the University Grants Committee and the National Advisory Body for Public Sector Higher Education recognised in their advice to the previous Secretary of State for Education and Science, education will need to be something that does not stop at age 16, 18 or 21. It will need to be a continuous process. Therefore we should be looking to higher education to provide the refresher and new skill courses for both industry and the professions and also an increasing number of second opportunities for adults.
Although I welcome the Government's recognition in their amendment of the importance of higher education, there is little sign in the Government's record so far that they have given priority to higher education. In fact, we are now spending a lower proportion of our gross national product on higher education than we were in the mid-1970s. So far, there is no sign of a Government strategy that will help to meet the future needs of the nation.
The Government admit that, since 1980–81, the universities have suffered a sharp cut in their resources. As the Minister with responsibility for higher education accepted in his 9 June reply to a parliamentary question from my hon. Friend the Member for Denton and Reddish (Mr. Bennett), who I am glad to see is here this evening, 13 universities suffered a cut in UGC funding of over 20 per cent. in real terms between 1980–81 and 1986–87. According to figures supplied by the Department of Education and Science, the aggregate cut over the same period for universities was 16·3 per cent.
The impact of cuts on this scale has been severe. The 1981–84 cuts fell most heavily on scientific and technological universities such as Aston, Salford and Bradford. In the current round of UGC cuts, science is still


being hit. The UGC is planning for cuts in student numbers in the physical sciences, mathematics and statistics.
Overall, the vast majority of universities have had to live from hand to mouth— hardly the best atmosphere in which to encourage the long-term planning and effective management for which the Jarrett committee called and that the Government say they support.
However, it is not just a question of the impact on universities. One has to consider also the effect on both the supply of graduates and research. At least 12,000 well-qualified students a year, who would otherwise have been successful, have failed to obtain university places, while the overall cut in the recurrent grant to the universities means that there is less money for research.
In addition, we are now facing a very serious brain drain, caused by poor rewards and uncertain prospects. Doctor David Ingram, the vice-chancellor of the univeristy of Kent, recently returned from a visit to the United States, said:
American universities made it clear that they expect to solve their difficulties in recruiting new staff by taking people from Britain's universities.
Figures provided by the British embassy in Washington show that more than 1,000 engineers and scientists are entering the United States from the United Kingdom each year. Britain cannot afford to lose its best talent in that way.
I pay tribute to the fact that in a remarkably courageous and honest speech to the council of the Association of University Teachers on 16 May, the Minister with responsibility for higher education referred to
the growing chorus of voices that is telling us that enough is enough and that the restrictions on public funding and pay that the universities have experienced in recent years cannot continue without significant damage not only to the universities directly but also to their capacity to produce the graduates and the research that the country needs.
The Minister need not feel ashamed of' what he said. He believed it and was right to say it when he did, and I respect him for it.
On the subject of research, the Government amendment refers to an 8 per cent. increase in the science budget, but it does not say that about half the expenditure on research comes through the University Grants Committee. As we have seen, the UGC funding to universities has been cut by at least 16 per cent. since 1980–81. In addition, as the Advisory Board for the Research Councils has warned the Secretary of State, the increasing sophistication of scientific equipment adds an average of 10 per cent. per annum above average inflation to research costs.
It is hardly surprising that the scientific community talks about a crisis and that a campaign to save British science was launched at the beginning of the year. The advisory board told the Minister's predecessor last year:
Over the last five years the Government has reduced the level of investment in scientists and their research in real terms against the trend in other developed countries. The economic and social effects on the United Kingdom of this may not become obvious for a few more years. However, we should warn the Government that when they do they are likely to be grave and effectively irreversible.
I should now like to speak about what has happened in the public sector. Before the Minister alleges that I have no interest in the public sector, as he has done in a number of debates that he will remember outside the House, I should remind him that it was a Labour Government who

created the polytechnics. There is no doubt that they have been highly successful and that they are providing effective and relative higher education for an increasing number of graduates, including one of my daughters. Without the polytechnics, the present problems in higher education would be considerably worse than they are.
The increase in the student population which the Government amendment mentions and which no doubt the Minister will speak about, has occurred in the public sector. Many of the students who might have gone to university if the number of places had not been cut have gone to the polytechnics. The increase is more the result of good luck than of good management by the Government. The Government have failed to provide the extra resources to match the extra students.
According to Government figures, the spend per student in the public sector has fallen by 22 per cent. in real terms since 1980–81. It is the local authorities, and especially the Labour authorities together with the NAB officials, who have until now insisted on giving priority to access, and rightly so. Both the NAB, the body responsible for planning and, more recently, the Council for National Academic Awards which is responsible for validation and review, have warned about the possible threat to quality if the spend per student continues to be cut. The CNAA has said:
Present resourcing levels will not permit the quality of courses and output to he sustained in the long run.
That is the background to the crisis of funding facing the public sector in 1987–88. I accept that the Government planning figures for that year are not immutable—that is one reason for the debate—but based on those figures the NAB committee has warned that if spending per student is to be retained and quality preserved, and if access is to be maintained, there will be a shortfall of £24 million. Unless the Government produce the extra money, that will mean that 9,500 student places will have to be cut. That is not just the estimate of the secretariat but the estimate of the NAB committee.
There is a threat to a number of polytechnic departments, including engineering departments at Sunderland and Wolverhampton. The Minister may say that this is a lot of scaremongering. I hope that those departments will not have to close, because it would be mad if they did. There is no doubt that those departments are threatened, because they have received letters from the NAB secretariat. Remember that the NAB is not in the pay of the Labour party but is trying to serve the NAB committee and the NAB council. It is an independent body, but of course it is excellently chaired by the Minister responsible for higher education, to whom tribute is due.
If the cuts in student numbers go ahead we will be turning away students who would be able to benefit from higher education, and that would be a clear breach of the Robbins principle. The Opposition believe, and our belief is supported by considerable evidence, that far more people could benefit from higher education than currently enjoy it.
The Government amendments says that substantially increased opportunities are being provided for adult and continuing education. Last year's Green Paper spoke of the importance of continuing education, but there is little evidence that the Government were prepared to provide extra resources for it.
A closer investigation of the Government's record suggests that they have cut resources for adult and


continuing education in a number of crucial areas. University extra-mural departments have been cut, the grant to the Workers Educational Association has been cut and local authority adult education services have been squeezed. I know that there is widespread support for the Open university and that hon. Members in all parts of the House are strong supporters of that university. It was forced to make a cut of £8 million in planned expenditure between 1984 and 1986 and sharply to increase its tuition fees. This means that the university has had to turn away 25,000 students, about half of whom wish to study science and technology. The vice-chancellor of the Open university has rightly called it a public scandal.
There is also the plight of Birkbeck college, which the Prime Minister recently praised for its achievements. She was right to do so, because Birkbeck is a unique institution that specialises in part-time education and performs a great service for the community. But, as a result of the latest round of cuts and the changed formula for part-time students, the existence of Birkbeck must now be in doubt. I hope that that is not true and that the Minister will say that he will provide resources for it. All this hardly suggests that the Government have yet given wholehearted support to adult and continuing education. They must do so because they ought to help those who want to help themselves and their country by getting a better education.
All of us who look to the decade ahead will agree that higher and continuing education is likely to grow in importance to Britain. I have already mentioned our national research needs. Industry requires a sustained supply of graduates; as the Engineering Council has reminded us, it also needs more opportunities for continuing education. On Monday, the Association of Graduate Careers Advisory Services issued its latest report on graduate employment prospects. It shows that there is already a disturbing and growing shortage of graduates in a number of key areas, and that there is a worrying 5 per cent. reduction in the number of engineering and technology graduates. What is even more disturbing for the future is the fall in the number of graduates who want to be teachers, especially of mathematics, physics and chemistry. Without the teachers, where are the scientists, engineers and mathematicians of the future to come from?
As the number of 18-year-olds begins to decline at the end of the decade, the problems could intensify. It is hardly likely that industry will need fewer graduates after 1990. If anything, industry will need more.

Mr. Harry Greenway: It is interesting to listen to the hon. Gentleman's catalogue of woe, but he has not explained what his party intends to do if it ever gets the opportunity to do something. Is he aware that vice-chancellors and principals across the country know that he is not committed to restoring any of the cuts that have been made?

Mr. Radice: If we were in power today, we would not be making cuts. When we come to office, we will immediately start to repair some of the damage that has been done to quality and research. We would provide new resources for access for mature and part-time students and for continuing education. I give the pledge that, in the mid-1990s, there will he more people in higher and continuing education under a Labour Government than is planned by the present Government.

Mr. Kenneth Hind: Will the hon. Gentleman give way?

Mr. Radice: No. I am sorry, but I must get on.
I have so far dwelt on the problems, but there are also big opportunities. In spite of the cuts, much of higher education is of a good quality. We still have high quality research institutions and departments and we have the potential for a major expansion of higher and continuing education. The fall in the number of l8-year-olds by 1990 which I mentioned earlier offers Britain a major opportunity to open up higher education to a much wider group than ever before.
I welcomed the new Secretary of State in our previous debate, but I welcome him again today if he feels like it. He has an opportunity to respond to the cries of, "Enough is enough," which were repeated by the Minister with responsibility for higher education and the chairman of the NAB board. He has an opportunity to make a fresh start. He should immediately stop the cuts in university grants for 1986–87 and 1987–88. He should give the public sector the £24 million for which it is asking. He should provide the extra resources for science and he should tell higher education that he will provide new money for access, part-time and mature students and continuing education. He must respond sympathetically to the new pay deal which has been agreed between the university lecturers and the vice-chancellors' committee.
Investment in higher education is vital for the country's future. The message which must come from this debate is that students and parents and industry and higher education are expecting the new Secretary of State to fight in the Cabinet for higher education. He will be judged not by his charm—

Mr. Bryan Gould: His what?

Mr. Radice: His charm. Nor will he be judged by his good looks or by his undoubted eloquence, but by the level of success that he achieves.

The Secretary of State for Education and Science (Mr. Kenneth Baker): I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof:
notes the importance of higher education for the future of the country: commends the Government on the increase of 17 per cent. in full time home student numbers since 1979, on the 8 per cent. increase in the science budget for the research councils as measured against average inflation, and on the substantially increased opportunities for adult and continuing education: and applauds the Government's intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants.".
I was very surprised to hear last week that the Opposition had chosen higher education as the subject for one of their Supply day debates, because it means free advertising time for the Government.
Since 1979, we have witnessed an unprecedented increase in higher education. It is futile for the Opposition to talk of cuts when there are now 77,000 more full-time home students in higher education than there were in 1979 and when the number of part-time students is 60,000 higher.
The increases are due not solely to the fact that there are more 18 and 19-year-olds. About one quarter of the increase can be attributed to the demographic bulge. Most of the rest is due to the increase in the proportion of 18 and 19-year-olds who enter higher education, which has risen


from 12·4 per cent. in 1979 to 13·9 per cent. last autumn. There has also been a 15 per cent. increase in the number of mature entrants from 34,000 to 39,000. All these increases contrast with the falls in student numbers and participation rates between 1975 and 1979.
Our policy is that places should be available for all with the intellectual competence, maturity and motivation to benefit from higher education. We are therefore committed to a regular review of the projections of future student numbers prepared for planning purposes. In 1984–85, more young people entered higher education than had been forecast. My Department is currently preparing revised projections which take account of this encouraging trend, and I hope to publish these new higher projections in the next few months. It remains the Government's clear objective to increase the proportion of young people who enter higher education.
Much has been made of comparisons with other countries. It is difficult to establish a common basis of comparison. In Britain, we tend to focus on the number of 18 and 19-year-olds who enter full-time courses, but other countries' statistics usually include all students, including part-timers. Japan's statistics, for example, include people on correspondence courses, and I understand that the figures for America include all those who undertake professional training in law, accountancy surveying, and the like. Nor must we forget that higher education courses in Britain are shorter and usually have lower wastage rates than those in other countries.
This is real statistical treacle and we must tread very warily. It is thick treacle and, treading as warily as I can, I must say that the best comparison is of the proportions who gain degrees and higher diplomas. On that basis, Britain is a little way behind Japan and America but on a par with achievements in France and West Germany and better than the rest of Europe.

Mr. Radice: rose—

Mr. Baker: I therefore deplore the Opposition's continued use of statistics of doubtful validity to make improper comparisons and to knock the achievements of our higher education system. I am aware that the hon. Member for Durham, North (Mr. Radice) wants to intervene. I had to listen carefully when he was interrupted by my hon. Friend the Member for Ealing, North (Mr. Greenway) regarding the commitment about Labour's spending plans for higher education. The deputy leader of the Labour party—

Mr. Radice: A very good man.

Mr. Baker: Yes. I shall come to his opinion of the hon. Member in a moment.
The deputy leader of the Labour party made a speech a little while ago, about which The Times Educational Supplement of 20 June 1986 said:
Hattersley rejects rapid university expansion.
The Guardian of 14 June 1986 said:
Hattersley trims hopes on higher education.
The Morning Star, blunt as ever, on the same date said:
Expansion not on, Hattersley tells dons.
The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that the money for higher education
will not be all that you need, even less will it be all that you ask for. To be frank, reasonable though I know him to be, I doubt if it will he all for which Giles Radice asks.
What a volume of condescension there was in the phrase,
reasonable though I know him to be.

He is a reasonable man—we are all reasonable men—but I have never known the adjective "reasonable" to be used in such a dismissive, cutting and final way.

Mr. Radice: The quotation continues:
We will replace the age of steep decline in higher education funding with an era of gradual expansion. If there is to be an argument between us it will be about the speed of improvement not the pace of deterioration or even the duration of stagnation. And I hope that my frankness in qualifying my promise of expansion will convince you of my sincerity in making the promise.
I have the shadow Chancellor on my side. Does the Secretary of State have the Chancellor of the Exchequer on his side? We shall have to see.

Mr. Baker: That was most moving. I have a quotation from the leader of the Labour party, not the deputy leader. The right hon. Member for Islwyn (Mr. Kinnock), at a press conference — I expect the hon. Gentleman was present—was asked by Beverley Anderson, an Oxford polytechnic lecturer and a former Oxford city Labour councillor:
You have to tell us how much money your education plans will cost and how much will go on our taxes and rates. If you do not, we will not take you seriously.
As the hon. Gentleman knows, there was no answer to that question.
The hon. Gentleman said a great deal about cuts in university funding. I acknowledge that the previous public expenditure White Paper envisaged that grants to universities would be reduced in real terms by 1988–89. We never disguised the fact that that would present universities with a difficult task, especially as, at the same time, we are asking them to improve and reshape their provision in the light of developing national needs.
Against that background, my predecessor announced five weeks ago that the Government are ready to increase financial provision for the universities, provided they demonstrate real progress in implementing and building on the changes that are needed. Those changes include better management, improved standards of teaching, selectivity in research funding and rationalisation of small departments. I shall be discussing the way forward with the University Grants Committee and the Committee of Vice-Chancellors and Principals during the next few months before reaching decisions on public expenditure in the autumn.
To those hon. Members who persist in favouring press speculation to fact, I must reiterate that the UGC has made no recommendations to me about university closures. I can categorically state that the Government have no plans for closures. This emphatically does not mean that every faculty can expect to continue as it is. Professor Bernard Crick, who is not a subscribing member of the Conservative party, in The Observer last Sunday questioned whether every university should offer such a wide range of studies — what he described as a department store approach.
There must be scope for change and reform. Patterns of study and research cannot remain inviolate and unchanged for long periods.
A hundred years ago in Oxford, 93 per cent. of students—all men— studied arts subjects, mainly Greek, Latin and theology. Only 7 per cert. studied mathematics and the natural sciences. Today, the pattern is completely different. Though still a centre of excellence for the study of classics and theology, only 8 per cent. of Oxford


students study such subjects, but about 40 per cent. are on science courses, and that picture is mirrored throughout the country.
My predecessor but one, my right hon. and learned Friend the Member for Warrington, South (Mr. Carlisle), encouraged moves to change the balance between science and the humanities in higher education. In 1979, the proportion studying science was 45 per cent., with 55 per cent. on humanities courses. Today, it is almost 48 per cent. science. By 1989, it may be more than 50 per cent. science. This trend reflects the needs of our society today. For our society to be rich and prosperous, we must produce more technologists and engineers. From their talents, inventiveness, skills and energies will come the continuing wealth of our country.
The Government can take pride in the fact that they have stimulated a shift to science and engineering courses. Since 1979, the number of students on those courses has increased by 30 per cent. to 175,000, compared with an increase in total student numbers of 17 per cent. That was achieved largely through the efforts of individual universities and colleges, the UGC and the National Advisory Body, to which I pay tribute.
Contrary to what the hon. Gentleman said, the UGC is planning further increases in science student numbers. Moreover, we have given this change two boosts: first, through the information technology initiative, which created 5,000 extra places in universities, polytechnics and other colleges in electronic engineering and computer science at a cost of about £38 million over three years; and, secondly, by the engineering and technology programme announced in March last year, which will provide 5,000 additional places on high-quality first degree and masters couses in engineering, applied physics, materials science and computer science. This will cost £65 million in its first four years. In addition, industry will be contributing more than £24 million in support of the programme.
I do not for a moment undervalue the role of the study of the humanities in higher education. They are an essential ingredient in a civilised and well-balanced society and, rigorously taught, they develop analytical and critical skills much valued by employers. But we must turn out more proficient engineers and technologists at all levels in the education system.

Mr. Max Madden: How does the Secretary of State reconcile what he has just said about the need for more engineers and technologists with the massive cuts that were made in the universities of Bradford, Salford and Aston in 1981, and the major cuts in those universities' budgets that were recently announced? It does not make sense. Can the Minister explain it to my constituents who are worried about the future of our universities?

Mr. Baker: I asked my officials to discover what will be the student intake this autumn. The best advice that I have—I cannot be categorical until the universities and polytechnics start again—is that there will be increases in the student intake this autumn.

Mr. Madden: Answer the question.

Mr. Baker: That is a good answer.
In technological education, as well as the massive increase in numbers starting courses of initial higher

education, we have begun to make progress in the much-needed development of continuing education and professional updating. I saw something of this in a college in Southall which I visited this afternoon. My Department is playing its part through the £6 million PICKUP scheme. That is an acronym for the professional, industrial and commercial knowledge updating programme. That programme supports a range of innovative projects designed to keep people working in industry up to date through relevant courses in colleges.
The hon. Member for Durham, North mentioned Birkbeck. I. too, place great value on part-time courses of higher education; and, in view of the recent speculation, I take this opportunity to commend the important contribution which Birkbeck makes in this regard. As I have already told the House, it is for London university's court to decide how its block grant from the UGC is allocated among the university's constituent colleges. However, in the light of representations, the UGC has agreed to reconsider the weighting that it as given to part-time students at Birkbeck. We shall be watching the outcome of the committee's review with interest. Much will depend on the evidence which Birkbeck college produces and, as Sir Peter Swinnerton-Dyer, who is a highly regarded mathematician as well as the UGC chairman, has made clear, this evidence will need to add up rather better than some of the figures that have been bandied about.
I shall now deal with a matter that has been mentioned in higher education debates — the recently announced assessment of research by the UGC. I applaud the UGC's attempt to assess the research quality of faculties in our universities. Three of the factors that were taken into account were quantitative: the number of academic staff and the number of research students, income from research councils, from medical and other research charities, and research contract income from industry and from Government Departments. The fourth and perhaps most important factor was the UGC's evaluation of the quality of research in each department, having regard to the university's research statements and to the views of the research councils, other research bodies and eminent experts.
Those qualitative judgments were reached by the subject sub-committees of the UGC, so that more than 120 academics and others were involved, representing a wide cross-section of the academic community. Who else could have done this effectively? The Government could not have done it.
I appreciate that any list of this sort is uncomfortable, because there are winners and losers. But it must be right to make a differential assessment. Otherwise the whole of university research is treated like the caucus race in Alice in Wonderland—a race devised by a mathematics don in which everybody wins. It is not right for the mediocre and the inadequate to bask in the glory of the outstanding and the brilliant.

Mr. Radice: I am not raising a debating point, one of the problems for the departments affected was that they did not know the criteria for the judgments made. That is one of the difficulties of the whole UGC process, and that is why the NAB is rather superior. We have more knowledge of why the NAB has taken its decisions.

Mr. Baker: That is a fair point, which has also been put to me by certain dons. I shall certainly discuss that with


the UGC to see whether it is prepared to be more open about things. But having discussed the issue, I think that the work was done on as reasonable and as proper a basis as possible. It is, of course, easier to analyse the research qualities of a university than its teaching qualities. However, one is not attempting to analyse the teaching qualities of a university in this way.
The hon. Member for Durham, North mentioned research funding. The science budget—the funds that go to research councils—has grown by 8 per cent. since 1979. The science budget now stands at over £600 million. With the research funds channelled through the UGC—which the hon. Gentleman recognised as an important source — spending on the science base now stands at over £1 billion per year. The Government also support research through the departmental research and development programmes of the major departments. Expenditure by civil Government Departments totalled a further £1 billion in 1984–85. Support for innovation in industry by the Department of Trade and Industry is a substantial part of the total. That is an important contribution to research. Its emphasis is now on collaborative pre-competitive ventures, bringing together industry with scientific researchers in the universities and research councils. A notable example of that is the Alvey programme, which I launched when I was at the Department of Trade and Industry.
I should like to be able to increase overall funding further. However, some important issues must be faced. Has Britain got the balance of effort right between different areas of research? Have we got too many centres and departments engaging in research in particular areas? Would we get better value for money if the money and people were concentrated in fewer larger centres? How can we do better at carrying our research through into commercially successful innovation in industry? That is one of the most important things. For years we have been a brilliantly inventive nation. Yet time and again hon. Members could cite examples of where that inventiveness has not gone through to product development and has not led to world-beating products being on sale.

Mr. Martin Flannery: It is all a question of money.

Mr. Baker: With respect, it is not just a question of money. A team with a brilliant inventor still needs someone to get the team's act together. When I was at the Department of Trade and Industry and was involved in a research programme directly related to industry, time and again I saw brilliant, outstanding and world-beating inventions in our universities, but I rarely saw a team that could take them to the stage of exploitation and development.

Dr. Jeremy Bray: I agree that it is not just a question of money. We need a total reversal of the Government's industrial policies. Is the right hon. Gentleman aware of the recent Advisory Council for Applied Research and Development report, which took up the theme of Martin and Irvine, whose book was subtitled, "Picking Winners"? The ACARD report said that the Government should pick winners and back them from the basic research stage through to applied research and development. Does the right hon. Gentleman espouse that philosophy?

Mr. Baker: When I was at the Department of Trade and Industry I found that one of the difficulties was that although one set out to pick winners, the losers often picked themselves. That is a problem. It does not mean to say that the Government do not need to promote and stimulate projects through their various agencies. From time to time we have had to take a big chance, but one must be prepared to do that, especially with the new technology.

Mr. Flannery: Will the Secretary of State give way?

Mr. Baker: I hope that the hon. Gentleman will forgive me if I do not give way, as this is a short debate. If I do give way, others may not be able to speak.
The hon. Member for Durham, North mentioned university pay. It has been asserted that the pay of university dons has fallen 20 to 25 per cent. behind the retail prices index since 1979, and demands have been made that the Government should give an immediate undertaking to foot the bill for restructuring salaries, as proposed by the AUT and the CVCP.
The Government reject the idea that pay should be settled solely by comparison with other groups. That happened in the 1970s and resulted in the spiralling inflation from which the Government had to rescue the country. We regard the main determinant in settling public sector pay to be what the country can afford in order to recruit, pay and motivate staff of the right quality.

Mr. Radice: What about the brain drain?

Mr. Baker: I shall come to that in a moment.
I recognise the figures quoted by the hon. Member for Durham, North as being those that are constantly quoted to us by the AUT. They are derived by excluding the Clegg-equivalent award — worth 17 per cent. — from cumulative salary increases since 1979. But the Clegg-equivalent increase was paid in April and October 1980, and on that basis cumulative salary increases between October 1979 and April 1985 — the time of the last salary increase—have almost kept up with inflation.
Nevertheless, there is some evidence to suggest that the present salary levels are not attractive to staff in those science and engineering disciplines where demand for skills is high. The proposals to which the hon. Member for Durham, North referred have indeed been put to the Government. I do not want to say anything about them now, except that, broadly speaking, we regard them as constructive, although there are some aspects that need to be developed further. Our willingness to consider making extra funds available will depend on the readiness of the universities and of the university lecturers to agree a new pay structure that provides greater flexibility and helps in the recruitment and retention of staff of an appropriate quality.
I turn to the polytechnics and to higher education outside the universities. That sector is crucially important and often attains a very high standard. I want to emphasise how vital it is. It now provides 55 per cent. of our higher education places, covering the polytechnics, which provide for some 30 per cent. of all higher education students, some 29 institutions that are grant-aided by my Department, providing 5 per cent. of all places, and a further 20 per cent. of all places are provided by 340 local authority colleges. There has been a dramatic and most welcome increase in the number of students in this sector


since 1979. That growth in home and European Community students has amounted to 35 per cent. That striking success contrasts with what happened under the previous Labour Government when, between 1975 and 1979, there was a reduction of over 6 per cent. in the number of public sector students. I do not know what the hon. Member for Durham, North was doing when he trooped into the Lobby in support of those cuts.
Public sector higher education has made a major contribution to the significant switch towards science and technology. Enrolments in England in those subjects have increased by 62 per cent.— almost double the average for other subjects. I am also glad to be able to report that we have reversed another trend. In 1975, women represented 37 per cent. of public sector students. By 1979, under a Labour Government, the figure had fallen to 35 per cent. It has now recovered to 39 per cent., and is set to grow further.
I must pay tribute to the exemplary record of polytechnics in serving the needs of industry, commerce and the professions. Between 1979 and 1985 the polytechnics' income from research, consultancy and other services rose by no less 'than 85 per cent. in real terms. I am sure that hon. Members will have visited departments doing quite outstanding research. I remember seeing some very sophisticated chip technology using gallium arsenide in one polytechnic research department, and the standard was higher than that of much of the work carried out at universities.
I shall give three examples of the contributions being made by polytechnics. I believe that we should sing their praises rather more. North Staffordshire polytechnic, which I visited a couple of weeks ago, is doing splendid work in computer-aided design and engineering, and in computer studies generally. I was interested to note that it came top for computer studies in the recent employers' poll on polytechnics in The Sunday Times. More than 400 companies—which will ultimately provide the jobs— were asked, and that polytechnic came out top for the polytechnics and third in the overall list, after two university departments.
There is also the Hatfield polytechnic, which came top in mechanical engineering and has provided an invaluable service through its HERTIS scheme, based on its library, which provides local firms with instant access to a whole range of relevant commercial and industrial data.
Finally there is the Polytechnic of Central London. It has built up a very exciting research programme in sectors such as electronic engineering. It has attracted support from a variety of sources, including my old Department, the DTI. It is also seeking to develop a programme to allow former students with promising ideas to develop them on a commercial basis—what the hon. Member for Durham, North was getting at — using the polytechnic's facilities and with finance from the venture capital market.
The Government have a good record on higher education, but there is no cause for complacency. I should like to see more of our young people at 18 and 19 going on to some form of higher education. Over the next few years, the actual numbers of 18 and 19-year-olds will fall substantially, and this will lead to quite a lot of necessary adjustments in higher education. I hope also that it will be

possible for us to attract into higher education a higher proportion of young people than enter it at present. We have done well, and we will do even better.

8 pm

Mr. Clement Freud: We are grateful to the official Opposition for tabling this motion, even if we are bemused by their claims in a recent leaflet:
Only one party has the right package of policies to do the job. That party is Labour.
One looks eagerly at what there is in the document, and all that one finds is a list of percentage changes in UGC funding. I doubt whether that will achieve all that the hon. Member for Durham, North (Mr. Radice) claims.
I am grateful to the Secretary of State for speaking in the debate, and I particularly welcome his constructive comments on young people, women and polytechnics. It is something for which we have been waiting a long time from a Secretary of State at Elizabeth house.
Twin crises face higher education. The first is funding, and academic pay plays a large part in it, threatening recruitment and retention; one welcomed what the Secretary of State promised— that he would look into this and constructively take heed of the AUT-CVCP discussions. The UGC overall funding by redistribution involves cuts in every institution except the London Graduate Business school. I hope that that will be noted.
There is a squeeze on the unit of resource in polytechnics, which threatens 9,500 places and threatens to bring about the same cycle of mistakes as we had in 1981 in the universities.
I welcome the fact that the Secretary of State has recognised that polytechnics are doing innovative work with new students. The staff have notably increased productivity and are teaching more students. Polytechnics have, until now, felt overlooked by the Government, even while meeting the Government's wishes on links to industry and the community.
The second crisis was touched on when the Secretary of State said that money cannot solve everything, because it is one of purpose. Those in higher education no longer feel that they are valued or respected by the Government. Many universities no longer feel a genuine involvement in the life of the communities, and there is a creeping feeling that higher education is marginal to the future of Britain, which is not helped by Governmentspeak about the sector being a drain on the economy. The danger is the creeping marginalisation of higher education.
When the Secretary of State took office he was widely welcomed in the press for his presentational skills. In his speech, he showed this on the subject of polytechnics; by acknowledging and rewarding the work that they do, he has laid a good foundation for better understanding in the maintained sector.
The twin crises are exemplified by the UGC letter, which concerns not only detailing of financial distribution, in which Scotland seemed peculiarly hard hit, but overall financial reductions. I hope that the Secretary of State will speak to the Secretary of State for Scotland to bring about the amelioration of that situation. The purpose of the reductions as expressed in the selectivity and criteria adopted by the UGC, has appeared on the scene with no explicit policy debate — it is a policy of repeat and default. The UGC has plumped for research as the guiding light, relegating teaching to a by-product or offshoot of


this, threatening the dual support system and putting on one side anything worthy but non-traditional, such as part-time work or more generous provision for non-standard entrants.
Neither the arm's length principle nor direct funding seems to be working as it should. I can give two examples, of which the first is Birkbeck, which is funded at arm's length. The Government are leaving the UGC to change its full to part-time ratios, leaving Birkbeck a potential deficit that can be made up only by increasing fees by 250 per cent. Birkbeck does not fit into the UGC straitjacket. Students are already paying their own fees, when students in other universities get fees and grants paid for them. The average pre-tax income of a Birkbeck student is £8,300, making them more ordinary, from more ordinary backgrounds, than standard entrants. Despite that, the UGC formula gives a standard undergraduate half as much money again as one at Birkbeck. A Birkbeck student gets four years at half funding, as against three one-year full funding.
The Minister may say that this is a domestic, London university court matter in which the Government should not interfere. However, his Department has interfered so much in that which it had no right to interfere that it ill behoves him to say nothing and do nothing, while Birkbeck suffers. I hope that he will look into this with compassion.
The second example is the Open university which enjoys direct funding, but does not enjoy it a lot. Last year, it turned away 24,000 students —these are not statistics of doubtful validity—which is a record rate of rejection. The Open university could educate many more students at a marginal extra cost, possibly £100 or £200 a year each, because of its peculiar funding system and because fixed costs are such a high proportion of its expenditure. I ask the Secretary of State to think about that. The Open university has its friends and allies on both sides of the House, and it is not a political matter. We have a great deal to be proud of in having an Open university, which is now suffering.
Despite the restriction on student numbers, the demands for graduates is high and increasing. The Government believe, and they have shown this in the YTS, that upping an individual's skill level not only increases the chances of that person getting a job, but raises the overall rate of employment. University careers officers report this week that employers are having difficulty finding enough graduates and vacancies are 20 per cent. above those in 1985. However, the overall "output", in Governmentspeak, is down, despite the polytechnic having taken surplus from universities.
The Government should abandon the projection of demand set out in the Green Paper and plan for a reasonably constant APR and fill in spare capacity with other types, such as part-time courses, mature and non-A-level entrants.
Why have the Government decided to take students out of the benefit system and close off a whole avenue of consideration by the review, and why are the 16 to 19-yearolds excluded from it? Two hopeful directions have thereby been immediately ruled out by the Government's terms of reference. We invite the Government to look at the possibility of integration rather than compartment-talisation, to recognise the value of taking people off the

dole in order to study—with the same money— and to ensure some flexibility to meet different costs which housing benefit currently provides for students.
I ask the House to look with care at the amendment to the Leader of the Opposition's motion. It states that the Government "applauds" their
intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants.
I should like the Minister to tell the House specifically how much that will cost, how much the Government will pay towards that intention to "build on these successes" through "increases in participation."
My right hon. and hon. Friends have tabled an amendment about the 16 to 19-year-olds. The big gap in educational chances and access to higher education used to come at 11 years old, with the 11-plus. We are pleased that that no longer exists but the gap now comes, increasingly, at 16 years of age.
It is very expensive to keep a young person on at school, because not only does school cost money for the purchase of books which used to be provided, but the family loses potential money from the wage or the training allowance.
It is insane that of two options—school or dole—the dole should be financially more attractive. The fall in the number of young people staying on at school is surely a result of that. It might also be due to the attractions of YTS and its cash. There is a good case for saying that the financial disparity which attaches to each choice is adversely affecting educational participation.
The Government must set up the right structure to give young persons in education something for themselves to put into their hands. Initially it need be only a gesture. It could be child benefit paid direct to a student. Like public lending right, which the House introduced at minimal financial provision, paying young people at the age of 16, and putting such a Bill on the statute book, would pave the way to the further increases which must come.
I ask the Government to take a careful look at the options. I ask them to examine funding fees for part-timers, who are doubly disadvantaged against full-timers because they receive no grant and have to find their own fees. The Government should consider diversifying the entrance requirements to include two years of YTS. Some institutions already have special schemes. I mention in particular the black teacher trainees at the North-East London polytechnic. The Government should consider widening the requirements, which would not only increase the pool of ability, but reduce the tyranny of examinations in schools. The Government should guide the University Grants Committee towards a better ratio of money for full and part-timers.
As Christopher Ball, the chairman of the National Advisory Board and warden of Keble, has written:
Our concern should not be that we might be putting at risk the quality of higher education by extending access to it … but rather that we are allowing to go to waste, undeveloped, too much inherent quality in our young people and in our adult population.
An alliance Government would embrace the "new Robbins" principle advocated by the UGC and the NAB in their advice to the Government before the Green Paper that
courses of higher education should be available for all those who are able to benefit from them and who wish to do so.


We would do that without the qualification imposed by this Government, which renders their formal acceptance totally meaningless.
We do not believe that we are yet at the limits of useful or rewarding participation in higher education. The House will be grateful to the Secretary of State for accepting that and for giving his promise to consider a rising participation rate in higher education.

Mr. Michael Shersby: I take the opportunity, as the first Government Back Bencher to speak, warmly to congratulate my right hon. Friend the Secretary of State on his splendid speech, which will do much to raise morale amongst all those interested in higher education. He spoke about the splendid opportunity which the hon. Member for Durham, North (Mr. Radice) had given him to advertise Conservative policy on higher education. I am sure that I reflect the views of all my right hon. and hon. Friends when I say that the Secretary of State took every opportunity to put his message across.
As usual, the Opposition are critical of the level of resources available, without saying how, if they were in office, they would increase them. In my judgment, the Opposition have failed to applaud and accept the reality of the 17 per cent. increase in full-time home students in universities and polytechnics since 1979, or the increased opportunities for adult and continuing education. We have heard the same old gloomy mixture from the Opposition Front Bench and from the Liberal spokesman, the hon. Member for Cambridgeshire, North-East (Mr. Freud).
We are talking about facts which call not just for a further moan about the level of resources, but for new and imaginative, resource-generating ideas to ensure that the future of our universities is secure.
I must declare an interest. I am a member of the court of Brunel university in my constituency. I regard part of my job, as the hon. Member for Uxbridge, to speak up for Brunel, for the excellent academic staff there and for the students who, between them, contribute to its enviable reputation. I do not, of course, seek to deny that Brunel has some difficult financial problems to solve.

Mr. Andrew F. Bennett: An 18 per cent. cut.

Mr. Shersby: If the hon. Member for Denton and Reddish (Mr. Bennett) will contain himself, I shall give him the real figures and he will be able to listen to my proposals for resolving the difficulties.
Brunel university has to cope with a reduction of £600,000 in its annual grant, despite receiving £13·1 million from the University Grants Committee, plus some additional fees for computer board income, making a total of £15 million. That is causing understandable concern to members of the Association of University Teachers who lobbied me recently. I represent many of them and their future is of great importance to me. The hon. Member for Durham, North will know of my interest in the AUT. I told its members, as I now tell the House, that I shall make their views known, without pulling my punches.
They and I know that one way of cutting costs is to eliminate teaching posts. Naturally, that worries them greatly. But even that is not an easy option because of the

present position on academic tenure. I hope that my hon. Friend the Under-Secretary of State will say whether the Government have any plans to abolish tenure. If they do not have such plans, other ways must be found to provide the necessary resources and to generate additional income. It is that latter possibility that I wish to explore in the debate.
If I branch into areas which are a little unconventional in a debate on higher education, I hope that the House will bear with me, because only by being innovative and creative can we look forward to providing the science and technology that we need for the future.
There may be some scope for further industrial research grants, but that scope is patchy and limited. It could, for example, produce another £250,000 profit, but that would still leave Brunel short of about £350,000 in the coming year.
Let us consider what positive options could be open not only to Brunel but to other universities that have been mentioned in the debate. The Government could make a meaningful contribution if it were made easier for industrial firms to establish a presence on university campuses to collaborate with academic departments. My right hon. Friend, with his creative and innovative approach to education, should urgently discuss that proposition with our right hon. Friend the Chancellor. Although under certain circumstances a university can keep the full rent for such an arrangement, those circumstances are still limited and there are still Treasury blocks. It is part of the job of every Member of Parliament to try to remove Treasury blocks. I am positive that my right hon. Friend will be in an admirable position to do so before we next debate this matter.
We need to encourage industry, through positive measures, to move on to the campuses and allow the universities to keep the rent. If a university could demonstrate that a commercial presence occupying space on its campus was to the benefit of both the university and the company and that it was not just a straightforward property deal, it should be allowed to retain the full financial benefit. That could generate considerable additional income.
The Government should do more to help establish departments of small firms in the universities. How would that work? If the House will forgive me, I shall take Brunel as my example because I know it well. The relationship that Brunel has with the Henley management college—one of the world's premier business schools — is well known. The strength of experience of Henley, together with Brunel's strength in applied science and technology, would provide a powerful base for the establishment of a chair of small firms. That chair could be concerned, first, with the technology transfer on which high-tech small firms are so dependent, and secondly, with the problems of management and finance.
Brunel and other similar universities, together with such colleges as Henley, have the expertise to provide a stronger base than most. I am sure that there are many other ways in which the whole concept of developing a chair of small firms could be progressed. What would it cost? It might be £30,000 a year, but that is only part of it. It would need at least two other academic posts and, perhaps, a research assistant.
I wonder what such an innovation would do for Britain. It would provide impetus to the development of short courses for those concentrating on the establishment of


small firms. It could also stimulate research into the creation of conditions that would provide the best opportunity for small firms to succeed. Is there any identification of the common thread that must exist between those small firms that succeed and those that do not? I doubt whether there has been any systematic analysis of that, but there should be.
Why is it that only one third of 1 per cent. of graduates — other than in the professions—start businesses of their own, while in America the figure is 2·5 per cent. and in Japan it is 3 per cent.? I did not hear anything in the remarks of the hon. Members for Durham, North and for Cambridgeshire, North-East about that very important aspect of university life. I am sure that it is not because they are not interested in it, but merely because they wanted to deal with other matters. No doubt they would agree with me that the development in our universities of an understanding of what is required from graduates to obtain their degrees and contribute to small firms is vital.
I shall repeat the figures — only one third of 1 per cent. of graduates, other than the professions, start their own businesses, while in America it is 2·5 per cent. and in Japan it is 3 per cent. Why is that?
One reason, perhaps, is that a new approach is required towards putting over the technique necessary in determining markets for products and services. That should happen at undergraduate level for those taking a degree in areas with developing technology that could be exploited if only they knew how and had the enthusiasm and drive to have a go. Surely that is where a heavy orientation towards short courses should be available.
Our country desperately needs more small firms to widen and expand our industrial and commercial base and to create new jobs for the future. Is not that, perhaps, where a partnership between Government, industry and the universities could make a major contribution to encourage more of our best young people to have a go?
The Government, through the Department of Employment, have already made a commendable start in aiding graduates towards self-employment. The graduate enterprise programme is an excellent system for linking graduates with the world of enterprise and small business. It is, of course, an awareness programme providing information about what a career in small business enterprise is like and how graduates have successfully started their own businesses or become members of a small business management team.
It is good to see the scheme operating in cities and towns such as Durham, Salford, Sheffield and many others. It is also encouraging to note that graduates of any discipline are welcome and that allowances and research budgets are available up to £1,250. That scheme is complemented by the graduate extension scheme. It is encouraging to have sponsorship for the various programmes coming from many well-known industrial and commercial firms.
I invite hon. Members who have not studied those schemes to do so—they are very interesting. They are not generally thought of in terms of higher education because they come under the auspicies of the Department of Employment. They should be much more widely known and regarded as part of higher education. Is that not the basis of an idea that my right hon. Friend's Department could extend to provide more industrial sponsorship for postgraduate courses? Surely it is worth much closer examination.
There is a need to ensure that more students can benefit from higher and continuing education. I greatly welcome my right hon. Friend's announcement on 18 June of a review of the whole structure of student support. It has been widely welcomed by my constituents, be they parents or students. I am especially glad that my right hon. Friend has announced an increase of £36 in the maintenance grants to students living away from home from the beginning of the next academic year. It is a small but useful addition to the 2 per cent. announced last December. It is an overall increase of 4 per cent., which with falling inflation will be more welcome than it has ever been before — [interruption.] —perhaps even to constituents of the hon. Member for Stoke-on-Trent, Central (Mr. Fisher), whose bad manners I have observed.
I hope that my hon. Friend the Under-Secretary will have every success with his review. I am especially glad that he will consider sponsorship by employers as well as other ways of ensuring that our students can look forward to a more secure and widely based financial support structure.

Mr. Stan Thorne: In view of the inordinately long speech to which we have just had to listen, I shall obviously have to cut the length of my speech radically if my hon. Friends are to have the opportunity of contributing to the debate. Perhaps that was the intention of the hon. Member for Uxbridge (Mr. Shersby).
Like the hon. Member for Uxbridge, I am associated with universities. The two with which I am associated are close to my constituency but not in it. These are the universities of Lancaster and Liverpool, both of which have found it appropriate to write to me about the debate. I shall not develop their representations particularly, as I wish to deal specifically With the Open university. Liverpool university makes it clear, however, that it faces a reduction of resources for recurrent expenditure of over 5 per cent. It is obvious that this will create major problems for the university. Lancaster university has told me that its block grant will lead to a reduction in education provision on a scale not hitherto experienced.
I have had the pleasure of being a mature student. In 1966, at the age of 48, I returned to school and was there for four years. Some hon. Members may not be prepared to accept this, but I believe that I have gained considerably from that experience. I was able subsequently to take a part-time position with the OU. I lectured at an institute of technology full time and assisted the OU by dealing with students of social studies, economics and politics. I was extremely impressed with the development that took place among those students. I do not want to go into great detail, but I remember especially a railway shunter who resided at Southport, who told me, "It is hopeless. I shall never make the progress that I need to make if I am going to get anywhere." Five years later, my wife and I happened to see a television programme on the OU, during which it was stated that a shunter was receiving his BA. That man had kept to it and he had succeeded. I mention that story because there are probably several million in Britain who, if they had the same opportunity, could produce the same sort of result.
The OU is turning away 25,000 potential students each year, about half of whom wish to study science and technology. This is a national disgrace. For a premium of' about £100 per head, the OU could expand its


undergraduate student body by about 10,000, and that could be done relatively quickly. To expand beyond that level would require significant additional resources. Discussions are taking place with the visiting committee appointed by the DES, under the chairmanship of Sir Austin Bide, which is to advise on the OU's expansion to 100,000 undergraduates from the present level of 65,000.
There has been a 15-year history of constant demand at the OU which it has not been able to satisfy. Reductions in funding have placed restrictions on student numbers. There were 56,000 applications in 1986, and 24,000 were not offered a place. The 1987 intake will be severely affected by the promises made to some 1986 applicants that they could be considered in 1987. The median age of OU undergraduates is 32. The size of the older age groups which make up the bulk of the student population, will increase by 3 million by the end of the century. The competition for scarce jobs brings us to the qualification escalation from 0-level to A-level, from HNC to a degree and so on. Entry to many occupations requires higher qualification and the threat of selective redundancy pushes many to seek further qualifications.
A sizeable group were affected by the exclusion from teacher training in the 1970s, when a 70 per cent. reduction took place. The number of qualified school leavers with A-levels who did not proceed to higher education has increased to nearly 30,000 per year. It has been suggested by a former Minister that of those who qualified in 1985, over 40,000 failed to take up higher education. As I have said, the demand for places in the OU will continue. Indeed, the demand is such that the university will be unable to guarantee a place to anyone without requiring a wait of at least one year, and possibly two. Increased fees that have run ahead of inflation have led to an increase in the number refusing the offer of a place. Nevertheless, in 1985 the OU turned away more people than were offered places.
This is having an effect on the regional balance of the student population, and the OU's ability to remain open as a truly national institution may be jeopardised. The House may be aware that more students gain entry to universities from south of the line drawn from the Wash to Bristol than from north of that line. This may reflect unemployment and social conditions in various areas. The OU is anxious to maintain a balance between the number of entries from each of its 13 regions. Given the high and sustained demand for places at the OU, it has been suggested that there is a case for establishing a second OU to meet it. It is clear that the OU could expand its programme for undergraduates and for students continuing in education more cheaply than a new institution could be founded.
The Prime Minister and other Government Front Bench spokesmen have often referred to Britain's need to be more competitive in world markets and to improve its technological and scientific performance. They have stressed the need for more training in those subjects. The Government should find the resources to make this possible instead of merely paying lip service to the need to do so. The OU can play a major part, and if the resources are available there will be no shortage of demand. The average number of applications during 1971–79 was 41,000 a year. That increased to 46,000 during 1980–86. There have been 56,000 applicants during 1985–86.
I note that some of my hon. Friends are becoming agitated, and perhaps they are thinking that it is time that I brought my remarks to an end. I shall do so in deference to their need.

Mr. Stephen Dorrell: I shall begin by declaring an interest, Mr. Deputy Speaker. I am a member of both the court and council of Loughborough university. It was in that capacity, if in no other, that I was interested in the speech of the hon. Member for Durham, North (Mr. Radice).
I am bound to say that I am disappointed — my disappointment is probably shared by my hon. Friends — by the fact that we did not hear what the Labour party's policy is on higher education beyond an assurance, which I hardly regard as bankable, that a Labour Government would do more than the Tories. We need from the Opposition and, as I shall argue, from the Government, a clearer statement of their objectives and of what they regard the higher education system to be about.
I have read the document which the hon. Member for Durham, North is holding up, and it does not say so. The hon. Gentleman spoke about input cuts. There have been input cuts, and I think that some of them have been damaging. It was nonsense for the hon. Gentleman to talk only about resources and not about the objectives that he has for the different parts of the higher education system.
It is a great pleasure to welcome the Secretary of State for Education and Science to his new position. At least he does look down the right end of the telescope. He does talk about student numbers, student access and subject balance. Furthermore, he does talk a little—I hope that we shall be able to encourage him to talk a little more—about the assurance of quality that those involved in the higher education system want to see. The Government should apply more effort to making clear to the House, the country, and especially the higher education system, what their objectives are for the different institutions in the system. I think that the best illustration of the doubts that continue to exist relate to what my right hon. Friend's definition would he of the purpose of the binary line. What is the difference between a university, a polytechnic and colleges in the public sector?
My right hon. Friend referred to the number of undergraduates in the system. The increase in the number of undergraduates is welcomed. If we continue to maintain the distinction between a university and a polytechnic, presumably there is a reason for doing so. We cannot continue indefinitely to lump the two together when it suits us and not define what the difference is. If my right hon. Friend addresses that issue and states what he sees as the difference, he will illuminate not only his view of the polytechnics and the public sector but his view of the university sector.
The Government attempted to address the issues in the Green Paper published last year. The Green Paper was not terribly well received in the higher education world. I hope that my right hon. Friend will be able to improve upon that when he publishes the White Paper which the Government have promised. I shall quote from the Green Paper on the specific topic of the binary line to illustrate the weaknesses contained in it. The paragraph on polytechnics takes up one half of one side of the Green Paper. The most positive comment made about the polytechnics in the Green Paper was:


There is however concern amongst them at the lack of public perception of their role in higher education. The Government shares this concern and has encouraged them to take steps to enhance their image.
I am sure that that is important, but I do not think that it tackles the substance of the issue. I hope that when my right hon. Friend writes his White Paper as a result of the consultation process which the Green Paper initiated, which was undoubtedly necessary, he will deal rather more substantially with those issues. I hope that he will define his objectives in terms of the quality and the service which both the public sector and the universities should be expected to offer. I hope that he will define his objectives in terms of the number of students we can expect to see having access not simply to higher education as a whole but to the different component parts, and the reasons why.
I think that if we are given a definition of his objectives in terms of numbers, we shall have a more powerful weapon with which to defeat the NAB in the entirely specious argument going on with the NAB over the provision of places in 1987–88. I know that my hon. Friend the Under-Secretary for Education and Science — the hon. Member for Buckingham (Mr. Walden) — will know that the NAB proposes to close the Loughborough college of art and design. I know that my hon. Friend is aware, although the House is not, that Loughborough college of art and design is the second largest college of art and design in the country. It has six to seven applicants per place for its higher education courses. Ninety per cent. of its graduates go straight into full-time employment. It shares a campus with Loughborough university and, therefore, benefits from all the ambience of a wider higher education clientele. It serves the specific needs of trained designers in an industry which any visitor to British industry and most British shops will see is necessary from the most superficial examination of British manufactured goods. The institution performs a vital role in our economy. Despite the specific advice to the contrary when the issue was last raised 18 months ago by the subject committee in the NAB organisation, the House will be amazed to hear that the NAB secretariat proposed the closure of Loughborough college of art and design.
I believe that that proposal amounts to an act of extraordinary vandalism. I believe that it was isolated because it would be an act of extraordinary vandalism. I understand that the NAB is involved in an exercise in brinkmanship with my hon. Friend. It is nothing more nor less than that. Regarding the need for a definition of objectives, especially in terms of student numbers, I say to my right hon. and hon. Friends that they have an opportunity to deny the NAB the pleasure of that brinkmanship if they commit themselves to clear objectives in terms of student numbers.
In my view, the White Paper should set out the objectives in terms of student numbers and state what those students will do when they enter the higher education system. I shall conclude by making a few remarks about what I see as the objectives of the university system as a distinct group from polytechnics. I hope that my right hon. Friend will define those objectives when he writes his White Paper.
Research is absolutely fundamental to my concept of a university. The purpose of a university is to allow the ablest students to mix with people who operate on the frontiers of scientific knowledge and with new and exciting

ideas in the cultural disciplines. To talk about a teaching-only university or a teaching-only department in a university is to misunderstand the concept of what a university is all about.
My right hon. Friend said that we cannot expect the structure of departments in universities, or the structure of universities themselves, to be set in stone and to be sacrosanct. I accept that. If there are to be changes in the balance between departments which might, in the first instance, lead to the idea of a teaching-only department, that raises the question of whether the department is a proper university department and should continue to exist as a university department. It is because of the central role of research in my understanding of what a university is about that I hope that my right hon. Friend will feel able to make a commitment, which I know his predecessor found difficult, that we shall not go down the road of teaching-only universities — that is a contradiction in terms — that we shall resist that and regard as a regrettable compromise any suggestion that there should be teaching-only departments.
In order to have good research in universities, we must also have the facilities for research. Obviously, we must have the people to undertake research. I welcome the fact that my right hon. Friend has made clear his commitment to provide sufficient resources to ensure that there is infrastructure in research. It is not enough to say, "We are providing money to the research councils and, therefore, projects are going into the universities." The infrastructure must be there as well to ensure that the research capability of our system matches what is available on the continent and in North America. We must offer pay levels and job opportunities to academics which make it realistic for us to recruit the best into what should be the jewels of our academic system—our university research departments.
I said at the beginning that we must define our objectives by outputs, not inputs. No one can deny that higher education as a whole is an expensive commitment. We cannot make commitments— in terms of research, student grants and academic salaries — by writing cheques on an endless bank account. We should stick to the commitment that we gave in 1983–84 to level funding of the university system. I welcome the statement by the previous Secretary of State that he hoped to provide more money to the university system in 1987–88 and beyond. I hope that that will materialise and that the target to which my right hon. Friend the present Secretary of State is working is the target of level funding against a 1983–84 base.

Mr. Ernie Ross: The severe cuts in funding to the Scottish universities announced on 20 May are just the latest in a series of blows to reduce the opportunities in education at every level. The effect of that cumulative reduction in funding is to reduce further the level of educational opportunities commonly available to Scottish students. It is an extension of a series of lost opportunities which have affected schools, colleges and universities since the Conservative party came to power.
Falling school rolls in Scotland should have been seen as an opportunity to improve pupil-teacher ratios and to increase the real level of funding per head. In fact, the opportunity has been wasted and used only as another excuse for wasteful cuts in Government funding. The Convention of Scottish Local Authorities has pointed out


the inadequacy of the Government support for Scottish schools. In 1985, not one educational authority in Scotland was able to contain educational expenditure within the relative needs assessment offered by Government. In every authority funds had to be diverted from other areas just to cover the most basic educational requirements.
The Scottish Tertiary Education Advisory Council's report took the view that declining numbers of school leavers in Scotland presented
an opportunity for a renewed commitment to the principle of maximum access
to further and higher education. In fact, the opposite has happened. An ever-increasing number of pupils are leaving Scottish schools with qualifications suitable for university entrance, yet the proportion of those 17-plus leavers gaining university places is not increasing. The number of new graduates at Scottish universities in each year since 1979 has remained roughly constant—in the 11,500 to 11,900 range — yet the proportion of well-qualified school leavers has increased from 8.6 per cent. to 10·5 per cent.
STEAC felt also that there were strong grounds to argue that the increases in the required parental contribution to the student grant and the cuts in real value of grant were having a noticeable effect in discouraging pupils from working homes from attempting to go into higher or further education. That is what has concerned the Opposition, but we did not hear from the Secretary of State about it.
There is clear evidence that the Robbins principle of providing university places for
all those qualified by ability and attainment
is being further eroded by the Government's attitude to student support. University intakes are increasingly reflecting a bias in favour of upper and middle-class families. The erosion of grants—the shifting of support from Government to students and their families—can 'only benefit the better-off and further inhibit the people from low income and unemployed households.
Donald McCallum, the chairman of the Scottish Tertiary Education Advisory Council, said that one of the most depressing things he had found during his recent review was the social difference in entry to higher education. More than 60 per cent. of children whose parents are in the professions took higher education, but that figure dropped to 5 per cent. for those whose parents were unskilled manual workers.
The National Union of Students in Scotland has attacked a Government philosophy on student support which is clearly intended
to encourage people to go out and do part-time jobs to supplement what is recognised as an inadequate grant
and added
that studying for a degree a tier working all night in a bar is hardly the way to improve educational standards.
We have been making noises and speeches for the past 20-odd years about opening up higher education to those disadvantaged groups within society. But, as Donald McCallum confirmed, the figures remain firmly the same. The STEAC report concluded that financial support was "crucial" to encouraging mature students and those from working-class backgrounds to take some form of higher education.

Mr. Willie W. Hamilton: My hon. Friend is making a justified attack on the Government's educational policies. Does he recognise that there are three education Departments in the United Kingdom — for England, Wales and Scotland — and that the only Department which has not been represented during the debate on the Government Front Bench is the Scottish Education Department? That is the greatest insult to Scottish people and Scottish Members of Parliament who are interested in the whole ambit of education.

Mr. Ross: My hon. Friend is correct. Almost everyone has accepted that Scottish universities have suffered disproportionately compared with other universities in the United Kingdom. Not only the Government Front Bench but the Conservative Back Benches have been empty of Scottish Members. Not one Scottish Conservative Back Bencher has been present during the whole debate. My hon. Friend is right to draw the attention of Scottish people to that important fact.
In an increasingly complex world, both in social and technological terms, the role of the nursery, primary and secondary schools as the sources of knowledge and understanding has never been greater. The skills exhibited by the modern teacher would not be recognised by a teacher who had left the teaching profession 20 years ago and would have outstripped even the skills of a teacher of only a decade ago. Those in the schools throughout this past decade and those entering the profession of teaching have faced the greatest changes and challenges. This has happened during a decade of falling investment in education's capital resources and in day-to-day expenditure on education.
The management side of the Scottish Joint Negotiating Committee recognised in its working party report on teachers' workloads published in August 1985 that the teachers' workloads had "significantly increased" as they responded and adapted to the new working methods and conditions. If we are to ensure that more young people go on to higher and further education, it is essential that the Government take account of the various inquiries into teachers' pay. Only today it was reported that the chairman of the Scottish Examination Board, Dr. Macintosh, said, in introducing the board's submission to the main inquiry on teachers' pay and conditions, that the
key message was that while teachers' duties on exams needed to be specified 'this by itself will not be sufficient: we also need the goodwill only a professional salary will generate and release.'
The Labour Party is firmly of the view that the greatest asset to the education service in the "professional" approach of teachers. It is that professional approach which developed the substantial role of pastoral care for which the Scottish education system was properly noted. Similarly, the extra-curricular activities of teachers were born of that same "professional" approach. The will and the wish are clearly identified in the teaching profession to re-establish that flexible approach to extra-curricular activities which previously enriched the school experience. That is why the Government must ensure that, whatever the recommendations of the main inquiry on teachers' professional standards and financial rewards, they must provide the finance to ensure that they do not seriously affect the responsibility of the various regional authorities for other aspects of education.
During my Adjournment debate on Wednesday 18 June, the Under-Secretary of State, said that I did not refer


to some of the areas in Dundee university. The following morning I received a letter from Professor Spear saying that the Dundee group, which is a leading British and European group on the subject of amorphous semiconductors, is presently underpaid because of the decision of the University Grants Committee. In spite of the fact that it has been given prestigious scientific awards such as the Max Born medal, the Europhysics prize, the Duddell medal and the Maxwell premium, physics at Dundee was assessed by the UGC as being below average. That further supports the point I was making and I intend to pursue it with the Under-Secretary at a later date.
We have made our policy quite clear and we have outlined it in our document "Education Throughout Life". In spite of what Tory Members may say, the people of Britain have more confidence in that document and it is that document which will do much more for higher education in this country than anything said from the Government Dispatch Box tonight.

Mr. Mark Wolfson: I congratulate my right hon. Friend the Secretary of State on his robust, encouraging and factual speech.
I want to spend a few minutes dealing with the content of higher educaton as well as expenditure. Value for money is directly relevant to my point. I want to highlight the importance of educating people at any age and stage to be as capable as possible of utilising all their knowledge, skills and abilities in work and leisure.
I shall describe what I understand to be education for capability, which is presently being promoted under the auspices of the Royal Society of Arts. That concept is already well developed in schools, and it is now appropriate to encourage similar developments in higher education. In Britain, there is an imbalance in the process described by the two words "education" and "training". The idea of the educated person is still often that of a scholarly individual who has not necessarily been educated or trained to exercise useful skills; who may be able to understand but not necessarily to act.
There have already been references in the debate to the problem of Britain often being able to develop new ideas in research and development but not being able effectively to put those ideas into productive operation. Young people in higher education increasingly specialise, and often in ways which mean that they are taught to practise only the skills of scholarship and science. They acquire knowledge of particular subjects, but they may not be equipped to use, that knowledge in ways that are relevant to the world outside the education system. An example of that is language teaching, which has recently been given a high priority by education Ministers. It has been lamentably ineffective in providing students with the ability to converse and communicate in a foreign language, even at the end of O and A-level courses.
Higher education entry requirements through the examination boards still place too much emphasis on teaching grammar and literature in language curricula at the expense of oral skills. As a result, British students, who spend as many hours learning a foreign language as their counterparts in Europe, complete their courses still inarticulate, although probably well versed in the literature and history of that language and its culture. Surely it is of far higher priority to produce students first with oral skills

and later with those other skills in foreign languages. Education for capability would give oral ability that first priority.
What is the fastest way to change the emphasis in language teaching? It is for university departments to require a far higher level of fluency in language than at present as a fundamental entry requirement. If that change were made—for example, if 60 per cent. of marks were given for oral skills — curricula and teaching methods would rapidly follow. They would have to. In that example I hope that I have made it clear that education for capability means the provision of knowledge and skills relevant to and useful in the outside world.
I have two other examples from engineering and medicine.
At Heriot-Watt university, the civil engineering dept has developed a radical new approach to its own teaching process—an approach designed to take greater account of' the students' needs as assessed by themselves — to help the students to know better how to learn and to establish methods by which they can assess their own progress. The details of how that is done are not for the debate. Suffice to say, the development is already proving successful.
In medicine, too, the capability required after full-time university education in some medical schools is now being more fully researched and analysed, and lessons are being drawn for changes in the structure of the curriculum.
Finally, at the North-East London polytechnic, a degree by independent study has been established, with considerable success. It allows students to achieve a degree based on the acquiring of knowledge and skills that they themselves have identified as necessary to them in 'their work and social setting.
My point is that effective higher and further education is crucial to the economic health and well-being of this country. That is a point on which the whole House is agreed. In bringing to the attention of the House those brief examples of initiatives taken within the concept of education for capability in higher education, I hope that my right hon. and hon. Friends on the Front Bench will give them and other similar initiatives a fair wind and consider how, through the direct funding within their own control, as well as through the University Grants Committee itself, such pilot schemes may be spread elsewhere. Indeed, the UGC may need to be restructured to become more user-friendly—as I would describe it—from the point of view of the user after rather than during education.
If student loans become part of the financial structure supporting higher and further education, they would have a direct effect by encouraging students to be more selective in their choice of both their university and course paying particular attention to how effective a chosen course would be in providing a capability in the world after education as well as providing knowledge that is valued for itself.

Mr. Kevin McNamara: I denounce what the hon. Member for Sevenoaks (Mr. Wolfson) has just said about student loans. Nothing worse could happen to students than that they should be subject to bank managers' whims, that they should have to do without food, and that they should have to have poor hooks and live in lousy accommodation to try to make


ends meet. I hope that one of the first things that the next Labour Government do is establish a proper rate of student grant and work towards abolishing the parental contribution. That contribution is evil in the way in which it affects students. It is rotten, particularly in the treatment of women students, because regrettably many parents are not prepared to give women students the proper support that they should get in university, if they have to make a contribution from their income.
The Secretary of State welcomed the debate as a splendid advertisement for the Government's policies. I want to look at the Government's policies, particularly as they affect Humberside and Hull. I want to examine the two enormous blows that we have suffered in the past month of May, in our university institution and college of higher education.
I do not say that in the recent rounds Hull has been treated that much worse than most universities. They have all been treated lousily. Events since 1981 show the bad picture of what has happened under a Conservative Government to Hull university. Hull's problems have been exacerbated by a historical basis of underfunding of about £500,000 a year. There were 20 per cent. cuts in 1981, and there has been an accumulation of additional cuts since then. After the most rigorous examination of their accounts, the university authorities are trying to raise funds from all sorts of different sources. Nevertheless they project a deficit of £500,000 at the end of this year. That deficit has caused the loss of more than 120 academic posts. In May of this year, the Government announced that there would be a 5·55 per cent. underfunding in real terms to the university. That means that the projected deficit on account to the end of 1986–87 is £1,600,000. That is a lot of money, and represents a lot of teaching jobs and places going vacant. That is a despicable thing to happen to the university.
However, the Department has failed to take on board the fact that that level of underfunding will have a serious effect on the local economy and the region as a whole. A study carried out in 1981 by the Leeds school of economics stated that Yorkshire and Humberside have to depend on higher education activity to maintain economic activity in their regions.
Hull university, with its 2,000 staff, academic and others, is the biggest employer in north Humberside, apart from British Aerospace. Cuts in the university funding effect the whole region. The university has an important role to play as an institution in a depressed area. I would like to give an example of how depressed the area is. B and Q advertised for 53 jobs in the constituency of my hon. Friend the Member for Kingston upon Hull, West (Mr. Randall). The Hull Daily Mail reported that there were more than 800 applications for those jobs. That illustrates the degree of unemployment in the area. Such a high level of applications for jobs, which would not have been regarded as terribly important or desirable 10 years ago, is indicative of the importance of public funding in the area.
Some 75 per cent. of university expenditure is allocated to salaries and students are expected to spend £2,000 per annum in an area. It is clear that universities bring fresh resources into the areas. These resources are not being provided in any other way and these resources mean jobs.
The Leeds school calculated that for every academic post lost, another five jobs are lost in the local economy. We are not talking about ivory towers or about preserving jobs in a separate and distinct world separate from ordinary people. We are concerned about ordinary people, the cleaners on the north Hull estate, technicians, clerks, and secretaries. All manner of jobs are being lost as a result of the Government's cuts. In the face of all that, the Secretary of State wanted to talk about advertisements.
The vice-chancellor of Hull university told me that, as a result of the 120 academic posts lost between 1981–84, together with the concurrent cut in student numbers of some 17 per cent., there was probably a net loss in the local community of 1,000 jobs. Many of those jobs were lost in my constituency.
An examination of the estimate made by the NUT of the effects of the clawback shows that if another 84 jobs are lost at the university as a result of the projected deficit of £1,600,000, that will mean another 420 jobs lost in the local community. The AUT calculates that some £2 million of fresh resources are being lost to the local communities. That is a direct cut in our standard of living.
In the face of such cuts, the university is asked to develop in other ways. It has tried to do that and has been successful in high technology of one sort or another, and I pay tribute to it for that. However, there have been cuts in courses. Highly popular joint degree courses have been lost. An employer's survey of universities showed that Hull university was the tenth university from which employers wanted to take students for jobs. Yet that university's resources are to be cut.
At a more mundane level, the university has to worry about problems of routine maintenance and check to see how tatty its buildings are becoming. At one time, those buildings were a pride to society which kept them going. The Government's policy is also badly affecting staff morale.
Yesterday I took a delegation to the Secretary of State to discuss the effects of cuts in the public sector, and especially the possible loss of initial primary teacher training on Humberside. On the basis of the Leeds school model, we may lose about 400 local jobs as well as nearly 500 teacher training places.
The Government are taking away the opportunities of our local students, and, by gosh, we do not have enough local students going on to higher and further education in the north. By their cuts the Government show that they do not think that we are worth it. That is why I asked the former Secretary of State what we had done to deserve constant cuts over the decade that the Government have been power. The cuts in educational opportunities for people in my area have been savage. We have witnessed intellectual, academic and economic vandalism by the Government.
I promised to speak for only 10 minutes if I was lucky enough to catch your eye, Mr. Speaker. I have taken nine minutes.

Mr. Robert Rhodes James: It is a great pleasure for me to follow the hon. Member for Kingstonupon-Hull, North (Mr. McNamara), first, because of my respect for him, secondly, because my wife was born in his constituency, and, thirdly, because my favourite and our greatest librarian, my friend Philip Larkin, was the hon.


Gentleman's constituent. I do not disagree wholly with the strength and fervour with which the hon. Gentleman put his case.
I warmly welcome the important steps taken by the new Secretary of State and his Parliamentary Under-Secretary to reverse certain deeply unfortunate trends in higher education that compelled me to resign from my position in December.
The Chancellor of the Exchequer's new proposals on charities, the revised student grant review, the withdrawal of certain proposals on benefits for students and the 4 per cent. increase in the grant mark a crucial turning point, though I should tell my right hon. Friend the Secretary of State that we still have some way to go.
I do not wish anything that I say to be critical of the previous Secretary of State—

Mr. William W. Hamilton: Why not?

Mr. Rhodes James: I have always had a high regard for my right hon. Friend the previous Secretary of State. The fact that our perceptions differed has not affected our personal friendship or that regard.
As I have emphasised to the House previously, when one looks back at what has gone wrong—and one has to look back over quite a period—one sees that the excessive euphoria of the 1960s was followed by excessive disillusionment. It is now time for new thinking. It is not just a question of new resources. Tragically, most of the assumptions under which Robbins operated have proved to be false.
I ask Ministers and others involved in the review to ask themselves, "What is higher education for? What is a university for? What is a polytechnic for?" My answer is that a university is a place where the love of learning for its own sake is honoured. The subject being studied does not affect that view. People who study engineering do not always become engineers; people who study history do not all become historians. The idea that if people are put into a specialty at the beginning they will emerge with that specialty is false. One needs flexibility and the burning faith of Lionel Robbins, for all his faults and for all the faults of his committee. He wanted young people to have a sniff of what higher education is all about.
I refer briefly to my right hon. Friend's remarks about academic salaries, which I most strongly welcome. They are hopelessly uncompetitive both in this country and abroad. The brain drain is a melancholy and strong reality. It is extraordinary that my 21-year-old daughter, who did not go to university, should be earning considerably more than a plasma physicist with a PhD at Cambridge university. With competition from the United States, Australia and West Germany, the position becomes unbearable. A Government who are supposed to be interested in market forces should bear this point very much in mind.
We shall await the results of the review of student loans. However, there is a substantial difference between first and second degrees. I am not opposed to a mixture of grants and loans, but very different considerations apply to the first and to the second degree.
I agree with what was said by the hon. Member for Durham, North (Mr. Radice) about the polytechnics. It is quite extraordinary that the Cambridge college of arts and technology proposes to abolish the study of geography. This is not just a constituency point. When Prince Albert

was vice-chancellor of Cambridge university, he introduced not only the natural sciences tripos but the humanities tripos. The two go together. Last year's Green Paper got it wrong. This time I ask my right hon Friend the Secretary of State for Education and Science and the House to get it right.

Mrs. Renée Short: I have been told, Mr. Speaker, that I have three minutes, which is not very long. I thought that the Secretary of State was very complacent when he opened the debate. He referred to the problems faced by the polytechnics. Two polytechnics are under threat in the west Midlands. One is Coventry, where planning courses have been told to close. The other is Wolverhampton, where the engineering department has been told to close. That has been denied. We do not know where we are. Perhaps the Minister who is to reply will say exactly what the position is.
One of the highest levels of unemployment is to be found in the west Midlands. An enormous number of engineering firms have gone to the wall because of this Government's policies. When the Labour party takes office, we shall need as many engineers and technologists as we can get. In this appalling period of unemployment, technology is advancing with great difficulty. The Government remain complacent, boringly unadventurous and incapable of understanding the technological revolution that has hit industry throughout the world, if the present policies are allowed to continue, Britain will be incapable of standing up to the competition from the more industrially advanced countries.
The Secretary of State referred to Japan. I shall use just a minute to refer to a valuable lecture by Professor Jost of Manchester on technology versus unemployment. He said that Japan, with twice the population of the United Kingdom, produces 60,000 more qualified engineers than the United Kingdom, of whom about 6,000 are engineers with higher degrees. In 1984, Japan produced nearly 19,000 graduates in electrical and electronic engineering, while we produced a mere 2,400. In addition, Japan produced over 2,000 graduates with higher degrees—the equivalent of MScs and doctorates—in these disciplines, yet Japanese industry complains of a shortage of electronics and software engineers. It is time that the United Kingdom produced more scientists than Japan.
Unemployment in this country is appalling. We are short of industrial investment and we are not producing the technologists and the engineers that we shall need. After the next general election when a Labour Government take office they will carry out massive investment in the deprived areas of this country, such as the west Midlands and Hull. We shall ensure that jobs are provided and that the standard of living of our people is raised.

Mr. Kenneth Hind: There are more students in higher education today than ever before and that is to the credit of a Conservative Government and their policies. We must given credit to the academics on the Robbins committee whose foresight for the development of our higher education system has ensured that many of us in the House are here because of Robbins. Many hon. Members are Robbins' children.
The Green Paper was mentioned. I hope that the Secretary of State will bear in mind some of the criticisms that have been levelled at the drop in the number of students by 1995–96 to 450,000. Many of us feel that the numbers are underestimated because we look at the number of children from middle class families who consistently seek higher education and see little or no change in that demand. If that demand prevails, there will continue to be a shortfall. I urge Education Ministers to look carefully at the statistics comparing Britain to our economic competitors. If they do that, they will see that the number of people entering higher education is unfortunately below the level of some of our competitors. We must work toward increasing that number.
The Government should work to the Green Paper. In some respects it has a great role to play, but it must be kept constantly under review and we must work on a day-to-day basis, because in some of its assumptions the Green Paper may prove to be wrong. I hope that the Minister will continue the drive that was started by his predecessor about increasing resources for research. I speak on behalf of the academics of Liverpool university because I am pleased to say that I liaise between them and this House. They would like to see an increase in the facilities and the amount of money available.
Many hon. Members have spoken better than I could about the importance of research in universities in relation to our industrial output. Can we have an increase in the number of teachers of mathematics, physics and statistics? The only way to bring about that increase is to ensure that teachers in higher institutes of learning are paid proper salaries. Those are my criticisms. The Government are on the right lines, but they ought to look at the failings and try to put them right. We should use some of the money that I hope the Secretary of State knows could be negotiated in the new future to improve the standard of higher education, because that is the seed corn of Britain for the foreseeable future.

Dr. Oonagh McDonald: I listened carefully to the speech by the Secretary of State. I noted his fancy footwork and the fact that he said nothing about the bids that he will put to the Chief Secretary for 1987–88 or what he expects to get. More important and significant than that, he had nothing to say about the response that he will make to the plea by the universities for £15 million reimbursement for unexpectedly high rates or about the £100 million that is desperately needed this year.
The Secretary of State's speech was far too complacent about the ability of the universities to meet the needs of our society, given the resources that are made available to them. He had nothing to say about the growing evidence of skill shortages in high technology subjects, or about the shortage of well over 1,000 physics teachers in our schools. He did not say that mathematics and science in our schools are all too often taught by teachers who have no proper qualifications in those subjects.
The right hon. Gentleman was far too complacent about the impact of the lack of resources on the universities' ability to teach and continue their research. The lack of resources might lead to cuts in books and periodicals, for example. There is growing and serious evidence of attacks on funds for such purposes and for

equipment. These are the tools of the trade. University teachers cannot work properly without adequate books and periodicals for them and their students, and it is nonsense to suppose that they can.
I should like to put in a special plea for Birkbeck college and to enter a personal note. Although I was a postgraduate student at Kings college in London, I attended postgraduate seminars at Birkbeck college when I was doing my masters degree while a full-time school teacher and again while I was researching full time for my PhD. It is one of the most valuable and important institutions in the country. It sets a pattern which, when I was a university teacher, I felt more universities should follow. It provides part-time education leading to first and higher degrees.
It is disgraceful that that institution now faces the possibility of a £2 million cut in grant. It is disingenuous of the Secretary of State to pretend that that is a decision for the University Grants Committee and that it has nothing whetever to do with the squeeze that his decisions and those of his predecessor have put on the university of' London.
The right hon. Gentleman's predecessor used to come to the Dispatch Box, look agonised and cut funds to universities. The present Secretary of State comes to the Dispatch Box, smiles and still cuts funds to universities. It reminds me all too clearly of Hamlet's words:
one may smile, and smile, and be a villain".

Mr. Barry Jones: The equipment and the fabric of our universities needs urgent repair or replacement and acedemic staff morale is low and declining. The system is in crisis yet employers are demanding more graduates and more research.
So says the Committee of Vice-Chancellors and Principals.
My hon. Friend the Member for Preston (Mr. Thorne) spoke passionately for the Open university, for which he has been a tutor. He has been a champion of continuing education and what he has said must be listened to and acted upon. My hon. Friend the Member for Thurrock (Dr. McDonald) emphasised the skills shortages and pleaded urgently, briefly but eloquently for Birkbeck. My hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) put her speech in the context of the appalling unemployment which is to be found in and around her constituency. My hon. Friend the Member for Dundee, West (Mr. Ross) described in detail the problems of the Scottish universities and called, effectively, I thought, for more working-class entrants to the university system.
My hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) denounced student loans and depicted with his usual fervour a serious situation in the university of Hull. It is clear that the Hull deficit is mountainous. The Government should assist in that area, as in others.
I listened to the hon. Member for Uxbridge (Mr. Shersby) who, as a member of the court of Brunel university, knows that it has real problems of finance which stem from the policies of the Government that he supports.
Likewise, I heard the sharp speech made by the hon. Member for Loughborough (Mr. Dorrell). He made a telling statement regarding extraordinary vandalism. He spoke against a closure of a college of art and design. I heard the hon. Member for Lancashire, West (Mr. Hind)


speak as a Robbins child and for Liverpool. He made substantial criticisms. I also heard a very cogent speech from the hon. Member for Cambridge (Mr. Rhodes James), who said that the brain drain was a reality.
The Secretary of State made some welcome remarks. I refer, for example, to the need for the UGC to be more open about its assessment procedure, and to the increase in the number of women students entering the public sector of education. But ultimately he stood by the cuts. He told us nothing about the 1987–88 funding plans and he gave no hope to universities and institutions of higher education despite the predicament in which they have been placed by the Government and the previous Secretary of State.
I turn briefly to the difficulties experienced in Wales. The university has been hard hit by constant underfunding on the part of the Government. Between 1980–81 and 1986–87 the individual colleges of Aberystwyth, Bangor, Cardiff and Swansea, as well as the institute of science and technology, have suffered major cuts in real terms. At the last general election the Prime Minister promised to hold funding steady in real terms after 1984–85. She did not keep that promise. It is in that context that we must judge the recently announced recurrent grant for the Welsh colleges.
The figures for this year in Wales are portrayed as minimal. That is misleading. They are very serious indeed. The UGC has calculated that the true rate of inflation in universities is about 5·25 per cent. It is with sadness that I say that the universities of Bangor and Swansea have suffered the severest blows. The average cut in Wales is even greater than the average for Scotland and is much higher than that for England. There appears to be a bias towards the comfortable south, and against Scotland, Wales and parts of the north of England. University staff in Wales, as well as the general public, are bitter about that, because Wales has had a raw deal.
The UGC did not publish its research criteria, but well-informed leaks suggest that an important factor in the assessment of research was the amount of money received from research councils and charitable bodies. The departments in the Welsh colleges are generally small, and the emphasis on quantity inevitably militates against the university of Wales. The university lecturers whom I have met say that research council funding seems to be biased towards the south-east of England.
The other major factor in the assessment is the unit cost. It was a deliberate policy of the university to evolve in a number of separate colleges, in order to provide higher education throughout Wales. That is an essential feature of our university. The university is large in terms of numbers, but the constituent colleges are small. They provide close-knit academic and cultural communities. The geographical spread of the university of Wales is a response, in part, to the very difficult geographic factors in Wales. We do not believe that they have been sufficiently taken into account by the UGC. We believe that the Government have neglected to consider the very special factors applying to the colleges of the university.
One specific factor that seems not to have been fully considered is the university's commitment to the Welsh language and culture. Given the extent of the cuts, the provision must have been minimal. I do not think that the Government realise the severity of the cuts imposed, or the consequences in Wales at a time of high unemployment.
The university is a major employer, and is arguably the largest employer in Wales after local government and the Health Service. Some 6,000 people are on the payroll, and there are probably 30,000 other dependent jobs. In Aberystwyth, 30 per cent. of the town depends on the university for its livelihood. In Bangor, 23 per cent. do so. In 1985–86, Swansea university paid over £ 1 million in rates. These universities create wealth, but the Government are dragging them down, and our communities will suffer.
The universities are striking out promisingly to create a new economy for Wales, because we have a good record of collaboration with industry. Aberystwyth has opened a science park in collaboration with Mid-Wales Development. The university college of Bangor has formed a company whose principal function is the production of high technology products. The university of Cardiff has set up an industry liaison unit and has recently created 60 new real jobs. Lampeter co-ordinates closely on housing, public transport and water quality with Mid-Wales Development.
The medical school is pre-eminent in renal medicine and next month at Swansea, the innovation centre, which is already active in microprocessing, will be opened In the institute of science and technology, the staff liaise with a series of suitable entrepreneurs. It is folly for the Government to subject these university colleges to annual cuts, to threaten the creation of jobs, to slow down high-tech development, stifle initiative and bring about redundancies. These colleges deserve praise, not harassment. They need encouragement and their record is worthy of that. They have been subject to severe cuts. I have to put into context those cuts and the difficult future that the universities face.
The Government have already cut regional aid and withdrawn hundreds of millions of pounds of rate support grant. The HMI has published a disturbing report on unsatisfactory conditions in primary and secondary schools. Our Health Service is desperately underfunded. Our unemployment has increased since 1979 by some 130 per cent., and we have lost 110,000 manufacturing jobs since the Government took office. Our universities are trying to create a new economy, trying to prepare the economy for the next century against a background of harrowing unemployment, but the Government still cut funding for our universities, which deserve a special consideration that they have not had.
In Wales, the universities represent hope to our people and a better future. The people of Wales see the Government working against that future and attacking it. I urge Ministers, even at this late stage, to think about the consequences of what they are proposing in the Principality. We want the Government to halt the cuts, and introduce level funding. The damage to the system must be repaired, and the quality of research must be enhanced. Extra resources should be channelled into the system for improved access to higher education and for part-time and continued education.
As my hon. Friend the Member for Preston said, millions of people are waiting for their opportunity, and that opportunity goes if the Government continue with cuts. I hope that the Under-Secretary will say that small institutions deserve special consideration because of the cuts. I want him to ensure that the commitment to the Welsh language and culture is taken fully into account by


the UGC. The feeling is abroad in Wales that the Secretary of State has not sufficiently defended the interests of Welsh universities in the face of the cuts.
In its early years, the university of Wales was founded upon the pennies of the Welsh poor. Before 1883, 100,000 people — quarrymen, steel workers, coal miners, farm labourers, shepherds, foresters and housewives — gave less than half-a-crown each to help establish the university of Wales. When the university of Bangor was opened, 3,000 quarrymen marched in lines of four to celebrate the opening of their university. The great W. E. Gladstone said that the Welsh people were "deeply enamoured of knowledge". That was certainly true in the last century.
The people of Wales fought hard to create a university in Wales. Their descendants will fight hard to protect it from this Government's wanton destruction.

The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): We have had an interesting debate and some interesting comments and suggestions have been made. If I am unable to answer all of them, I am sure that my hon. Friend the Under-Secretary of State for Education and Science, who has special responsibility for higher education, will have noted them and may contact hon. Members.
I must reiterate some of the main points made by my right hon. Friend the Secretary of State at the beginning of the debate because it is clear that some Opposition Members appear not to have heard them.
First, there are record numbers of students in higher education and participation rates for both young and mature entrants are at an all time high. I can tell my hon. Friend the Member for Lancashire, West (Mr. Hind) that new projections for future student numbers will be published in the next few months, and that we shall be aiming at a further increase in the proportion of young people entering higher education.
Secondly, there has been a significant shift in the balance of higher education towards science and technology. Our policies should ensure that that continues so that industry's needs for qualified manpower can be more fully met; but we have no intention of underrating the importance of rigorously taught arts and humanities courses.
Thirdly, my right hon. Friend reiterated the Government's willingness to increase financial provision for universities if they demonstrate a commitment to the pursuit of better management, improved standards of teaching, selectivity in research funding and the rationalisation of small departments.
Fourthly, we applaud the major contribution now being made by the public sector to higher education. From my experience in the Principality, I know just how vital that is.
Fifthly, we acknowledge the outstanding issues on pay. From the Government's view, progress depends crucially on the introduction of new pay structures which are flexible and responsive to current and prospective needs.
The hon. Member for Alyn and Deeside (Mr. Jones) mentioned the university of Wales and its colleges. I thought that he would. They have not come out of the University Grants Committee exercise as well as they had hoped. The same might be said of many of the universities

mentioned in the debate. The criteria applied by the UGC to the university of Wales were no different from those applied to universities and colleges elsewhere. I am glad that the hon. Member for Kingston upon Hull, North (Mr. McNamara) acknowledged that. The same criteria were applied to Scotland.
The reduction in the allocation for Wales should not be exaggerated. The safety net arrangements have ensured that no college's allocation is more than 0·5 per cent. lower than it was this year. Some of the university's colleges will receive more grant than this year — for example, the institute of science and technicology, St. David's, Lampeter, the college of medicine and the university registry. We did not hear about those from the hon. Member for Alyn and Deeside. There is no justification for the eschatological view that he expressed.
The hon. Gentleman pressed the case of funds for the Welsh language. The UGC has made a special allocation for that, recognising the special needs of the university in that respect. Unlike the hon. Gentleman, I do not think that the grant allocations for next year are a threat to the future of the university's colleges. On the contrary, they represent a signal for the university and its constituent colleges that urgent action is needed to find ways to rationalise the present pattern of provision.
The new approach should be seen as an incentive to build on existing strengths and to improve the management of the resources available to the colleges. If that is done, I do not doubt that the colleges will be in a stronger position to attract higher levels of funding from the UGC in future—[Interruption.] If the hon. Member for Alyn and Deeside is interested in having answers to his questions, he should listen. The UGC and I welcome the decision of the university of Wales to set up a rationalisation committee. I very much hope that the constituent colleges will participate actively in its work.
The hon. Gentleman knows only too well that direct responsibility for the university lies with my right hon. Friend the Secretary of State for Education and Science. Therefore, it would not be appropriate for my right hon. Friend the Secretary of State for Wales to have discussions with the university or its colleges about the grant allocations. However, that does not imply a lack of concern. On the contrary, we both take a close interest in the affairs of the university—

Mr. Hind: rose—

Mr. Roberts: We keep in close touch with the UGC to ensure that Welsh needs are fully taken into account—

Mr. Hind: Will my hon. Friend give way?

Mr. Roberts: My right hon. Friend the Secretary of State and I met the chairman of the UGC recently to discuss next year's allocation—

Mr. Hind: Will my hon. Friend give way?

Mr. Roberts: We have taken every opportunity to emphasise the importance—

Mr. Hind: rose—

Mr. Speaker: Order. If the Minister does not wish to give way, the hon. Gentleman must not persist. This has been a good-natured debate and hon. Members have been given a fair hearing.

Mr. Roberts: We have taken every opportunity to emphasise the importance that we attach to the role of the


university in assisting industry in Wales and in attracting new high technology firms to the Principality. The hon. Member for Alyn and Deeside may rest assured that we will continue to take a close interest in the university's programme and support the university in any way that we can.
The Opposition have entirely overlooked the spectacular growth in public sector higher education in Wales. Between 1979 and 1984, the number of students grew by 46·3 per cent.

Mr. Barry Jones: rose—

Mr. Roberts: There has been a massive increase since 1979—

Mr. Barry Jones: rose—

Mr. Speaker: Order. One hon. Member at a time, please.

Mr. Roberts: I know that Opposition Members do not like to hear these figures. Between 1979–80 and 1984–85, expenditure by local authorities on advanced and further education in Wales increased by 25 per cent. in real terms while student numbers increased by 46 per cent. There has been a tremendous shift towards science and technology, which we all welcome. Engineering and technology enrolments have increased by 49 per cent. over the same period. Science enrolments have increased by 67 per cent. over the same period.

Mr. Barry Jones: rose—

Mr. Roberts: No, I shall not give way. I must answer the questions that have been raised during the debate. A number of issues have been raised and I am seeking to respond to them.
My hon. Friend the Member for Uxbridge (Mr. Shersby) made a series of valuable suggestions about the involvement of industry and small businesses on campuses. He referred also to academic staff tenure. There can be no doubt that tenure in the form in which it is enjoyed by many academics is a major barrier to management flexibility and efficiency in the university system. The Government intend to go ahead, as soon as the parliamentary timetable allows, with legislation to limit the nature of the tenure which can be granted in future.
A number of hon. Members have referred to the Open university, including the hon. Member for Preston (Mr. Thorne). The OU is a large enterprise already, with over 60,000 undergraduates and a further 55,000 students using its continuing education PICKUP type courses and materials. It has more students now than ever before. Its achievements are especially impressive in subjects that are regarded by many as difficult to teach, such as mathematics, science and technology. It responded last year to the Government's programme for more high technology students with proposals that earned it substantial extra funding. I know that my right hon. Friend the Secretary of State believes that the OU has not reached its full potential to expand provision in these areas.
The hon. Member for Durham, North (Mr. Radice)—

Mr. Barry Jones: rose—

Mr. Roberts: —has a certain hectoring—

Mr. Barry Jones: Will the Minister give way?

Mr. Roberts: No. I will not give way to the hon. Gentleman.
I must repeat the undoubted fact that the Government's record on higher education is good. We are grateful to the Opposition for giving us the opportunity to advertise this. Indeed, we are doubly grateful because their record of falling student numbers and participation rates between 1975 and 1979 provides a telling contrast with the substantial increases—

Mr. Ray Powell: On a point of order, Mr. Speaker. Is it not customary for a Minister who is replying to a debate to allow an Opposition spokesman to intervene to ask a question? The Minister knows that my hon. Friend the Member for Alyn and Deeside (Mr. Jones) wishes to ask him some questions about Bangor university. The Minister has no answers to the questions that my hon. Friend is likely to put to him, and that is why he will not allow him to intervene.

Mr. Speaker: The more that points of order are raised, the less chance the Minister will have of responding to the debate.

Mr. Roberts: The hon. Member for Ogmore (Mr. Powell) has not been present, for the debate.
The country is benefiting already from the increased output of graduates, and especially from the 30 per cent. increase in science and technology places. However, we are not complacent. The switch towards science needs to go a little further yet. Above all, we need continuing increases in participation rates for both 18 to 19-year-olds and mature entrants to higher education. The quantity and quality of research in our higher education institutions, especially our universities, has long been recognised as a national asset. Since 1979 research councils' funding has been increased by 8 per cent. in real terms as my right hon. Friend said earlier.
Our record shows the effective use of resources and a massive increase in opportunities. That is our record in higher education. We are proud of it. Our policies will continue to build on those successes well into the 1990s. I ask my right hon. and hon. Friends to reject the Opposition's motion and to support the amendment in the name of the Prime Minister.

Mr. Ray Powell: The Minister, in replying to the debate, would not allow—

Mr. Mark Fisher: rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly, That the original words stand part of the Question:—

The House divided: Ayes 196, Noes 267.

Division No. 234]
[10 pm


AYES


Abse, Leo
Bell, Stuart


Alton, David
Benn, Rt Hon Tony


Archer, Rt Hon Peter
Bennett, A. (Dent'n &amp; Red'sh)


Ashdown, Paddy
Bermingham, Gerald


Ashley, Rt Hon Jack
Bidwell, Sydney


Ashton, Joe
Blair, Anthony


Atkinson, N. (Tottenham)
Boothroyd, Miss Betty


Bagier, Gordon A. T.
Boyes, Roland


Barnett, Guy
Bray, Dr Jeremy


Barron, Kevin
Brown, Gordon (D'f'mline E)


Beckett, Mrs Margaret
Brown, Hugh D. (Provan)


Beith, A. J.
Brown, N. (N'c'tle-u-Tyne E)






Brown, Ron (E'burgh, Leith)
Kirkwood, Archy


Bruce, Malcolm
Leadbitter, Ted


Buchan, Norman
Leighton, Ronald


Caborn, Richard
Lewis, Ron (Carlisle)


Callaghan, Rt Hon J.
Lewis, Terence (Worsley)


Callaghan, Jim (Heyw'd &amp; M)
Litherland, Robert


Campbell, Ian
Livsey, Richard


Campbell-Savours, Dale
Lloyd, Tony (Stretford)


Carlile, Alexander (Montg'y)
Lofthouse, Geoffrey


Carter-Jones, Lewis
Loyden, Edward


Cartwright, John
McCartney, Hugh


Clark, Dr David (S Shields)
McDonald, Dr Oonagh


Clarke, Thomas
McGuire, Michael


Clay, Robert
McKelvey, William


Clelland, David Gordon
MacKenzie, Rt Hon Gregor


Clwyd, Mrs Ann
McNamara, Kevin


Cohen, Harry
McTaggart, Robert


Conlan, Bernard
McWilliam, John


Cook, Frank (Stockton North)
Madden, Max


Cook, Robin F. (Livingston)
Marek, Dr John


Corbett, Robin
Marshall, David (Shettleston)


Corbyn, Jeremy
Martin, Michael


Cox, Thomas (Tooting)
Mason, Rt Hon Roy


Craigen, J. M.
Maxton, John


Crowther, Stan
Maynard, Miss Joan


Cunliffe, Lawrence
Meacher, Michael


Davies, Rt Hon Denzil (L'lli)
Meadowcroft, Michael


Davies, Ronald (Caerphilly)
Michie, William


Davis, Terry (B'ham, H'ge H'I)
Mikardo, Ian


Deakins, Eric
Millan, Rt Hon Bruce


Dewar, Donald
Miller, Dr M. S. (E Kilbride)


Dixon, Donald
Morris, Rt Hon A. (W'shawe)


Dormand, Jack
Nellist, David


Douglas, Dick
Oakes, Rt Hon Gordon


Dubs, Alfred
O'Brien, William


Duffy, A. E. P.
O'Neill, Martin


Eadie, Alex
Orme, Rt Hon Stanley


Eastham, Ken
Owen, Rt Hon Dr David


Edwards, Bob (W'h'mpt'n SE)
Park, George


Evans, John (St. Helens N)
Parry, Robert


Field, Frank (Birkenhead)
Patchett, Terry


Fields, T. (L'pool Broad Gn)
Pavitt, Laurie


Fisher, Mark
Penhaligon, David


Flannery, Martin
Pike, Peter


Forrester, John
Powell, Raymond (Ogmore)


Foster, Derek
Prescott, John


Foulkes, George
Radice, Giles


Fraser, J. (Norwood)
Randall, Stuart


Freeson, Rt Hon Reginald
Raynsford, Nick


Freud, Clement
Redmond, Martin


Garrett, W. E.
Rees, Rt Hon M. (Leeds S)


George, Bruce
Richardson, Ms Jo


Gilbert, Rt Hon Dr John
Roberts, Ernest (Hackney N)


Godman, Dr Norman
Robertson, George


Gould, Bryan
Robinson, G. (Coventry NW)


Gourlay, Harry
Rogers, Allan


Hamilton, James (M'well N)
Ross, Ernest (Dundee W)


Hamilton, W. W. (Fife Central)
Ross, Stephen (Isle of Wight)


Hancock, Michael
Rowlands, Ted


Hardy, Peter
Ryman, John


Harrison, Rt Hon Walter
Sedgemore, Brian


Hart, Rt Hon Dame Judith
Sheerman, Barry


Hattersley, Rt Hon Roy
Sheldon, Rt Hon R.


Heffer, Eric S.
Shields, Mrs Elizabeth


Hogg, N. (C'nauld &amp; Kilsyth)
Shore, Rt Hon Peter


Holland, Stuart (Vauxhall)
Short, Ms Clare (Ladywood)


Home Robertson, John
Short, Mrs B.(W'hampfn NE)


Howells, Geraint
Silkin, Rt Hon J.


Hoyle, Douglas
Skinner, Dennis


Hughes, Robert (Aberdeen N)
Smith, C.(lsl'ton S &amp; F'bury)


Hughes, Roy (Newport East)
Smith, Rt Hon J. (M'ds E)


Hughes, Simon (Southwark)
Snape, Peter


Hume, John
Soley, Clive


Janner, Hon Greville
Spearing, Nigel


Jenkins, Rt Hon Roy (Hillh'd)
Steel, Rt Hon David


John, Brynmor
Stewart, Rt Hon D. (W Isles)


Johnston, Sir Russell
Stott, Roger


Jones, Barry (Alyn &amp; Deeside)
Strang, Gavin


Kaufman, Rt Hon Gerald
Straw, Jack


Kennedy, Charles
Thompson, J. (Wansbeck)





Thorne, Stan (Preston)
Winnick, David


Torney, Tom
Woodall, Alec


Wallace, James
Wrigglesworth, Ian


Wareing, Robert
Young, David (Bolton SE)


Welsh, Michael



White, James
Tellers for the Ayes:


Wigley, Dafydd
Mr. Derek Fatchett and


Williams, Rt Hon A.
Mr. Allen Adams.


Wilson, Gordon



NOES


Adley, Robert
Dunn, Robert


Aitken, Jonathan
Durant, Tony


Alexander, Richard
Dykes, Hugh


Amery, Rt Hon Julian
Edwards, Rt Hon N. (P'broke)


Amess, David
Eggar, Tim


Ancram, Michael
Emery, Sir Peter


Arnold, Tom
Evennett, David


Ashby, David
Eyre, Sir Reginald


Aspinwall, Jack
Fairbairn, Nicholas


Atkins, Robert (South Ribble)
Fallon, Michael


Atkinson, David (B'm'th E)
Farr, Sir John


Baker, Rt Hon K. (Mole Vall'y)
Favell, Anthony


Baker, Nicholas (Dorset N)
Finsberg, Sir Geoffrey


Baldry, Tony
Fletcher, Alexander


Batiste, Spencer
Fookes, Miss Janet


Beaumont-Dark, Anthony
Forman, Nigel


Bellingham, Henry
Forsyth, Michael (Stirling)


Bendall, Vivian
Forth, Eric


Benyon, William
Fowler, Rt Hon Norman


Biffen, Rt Hon John
Fox, Sir Marcus


Biggs-Davison, Sir John
Franks, Cecil


Blaker, Rt Hon Sir Peter
Fraser, Peter (Angus East)


Bonsor, Sir Nicholas
Freeman, Roger


Boscawen, Hon Robert
Fry, Peter


Bottomley, Peter
Galley, Roy


Bottomley, Mrs Virginia
Gardner, Sir Edward (Fylde)


Bowden, A. (Brighton K'to'n)
Garel-Jones, Tristan


Boyson, Dr Rhodes
Gilmour, Rt Hon Sir Ian


Braine, Rt Hon Sir Bernard
Glyn, Dr Alan


Bright, Graham
Goodhart, Sir Philip


Brinton, Tim
Goodlad, Alastair


Brooke, Hon Peter
Gow, Ian


Brown, M. (Brigg &amp; Cl'thpes)
Gower, Sir Raymond


Browne, John
Grant, Sir Anthony


Bruinvels, Peter
Greenway, Harry


Buchanan-Smith, Rt Hon A.
Gregory, Conal


Buck, Sir Antony
Griffiths, Sir Eldon


Budgen, Nick
Griffiths, Peter (Portsm'th N)


Bulmer, Esmond
Ground, Patrick


Burt, Alistair
Grylls, Michael


Butler, Rt Hon Sir Adam
Hamilton, Neil (Tatton)


Carlisle, John (Luton N)
Hampson, Dr Keith


Carlisle, Kenneth (Lincoln)
Hanley, Jeremy


Carlisle, Rt Hon M. (W'ton S)
Hannam, John


Carttiss, Michael
Hargreaves, Kenneth


Cash, William
Harvey, Robert


Chalker, Mrs Lynda
Havers, Rt Hon Sir Michael


Chapman, Sydney
Hawkins, C. (High Peak)


Chope, Christopher
Hawksley, Warren


Churchill, W. S.
Hayes, J.


Clark, Dr Michael (Rochtord)
Hayhoe, Rt Hon Barney


Clark, Sir W. (Croydon S)
Hayward, Robert


Clegg, Sir Walter
Heathcoat-Amory, David


Cockeram, Eric
Heddle, John


Colvin, Michael
Henderson, Barry


Conway, Derek
Heseltine, Rt Hon Michael


Coombs, Simon
Hickmet, Richard


Cope, John
Hicks, Robert


Cormack, Patrick
Hill, James


Corrie, John
Hind, Kenneth


Couchman, James
Hirst, Michael


Cranborne, Viscount
Hogg, Hon Douglas (Gr'th'm)


Critchley, Julian
Holland, Sir Philip (Gedling)


Currie, Mrs Edwina
Holt, Richard


Dickens, Geoffrey
Hordern, Sir Peter


Dicks, Terry
Howarth, Alan (Stratf'd-on-A)


Dorrell, Stephen
Howarth, Gerald (Cannock)


Douglas-Hamilton, Lord J.
Howell, Rt Hon D. (G'ldford)


du Cann, Rt Hon Sir Edward
Hunt, David (Wirral W)






Hunt, John (Ravensbourne)
Mawhinney, Dr Brian


Hunter, Andrew
Mayhew, Sir Patrick


Jackson, Robert
Mellor, David


Jenkin, Rt Hon Patrick
Merchant, Piers


Jessel, Toby
Meyer, Sir Anthony


Johnson Smith, Sir Geoffrey
Miller, Hal (B'grove)


Jones, Gwilym (Cardiff N)
Mills, Iain (Meriden)


Jones, Robert (Herts W)
Miscampbell, Norman


Joseph, Rt Hon Sir Keith
Mitchell, David (Hants NW)


Kellett-Bowman, Mrs Elaine
Moate, Roger


Kershaw, Sir Anthony
Monro, Sir Hector


Key, Robert
Montgomery, Sir Fergus


Knight, Dame Jill (Edgbaston)
Moore, Rt Hon John


Knowles, Michael
Morris, M. (N'hampton S)


Knox, David
Morrison, Hon P. (Chester)


Lang, Ian
Moynihan, Hon C.


Lawler, Geoffrey
Murphy, Christopher


Lee, John (Pendle)
Neale, Gerrard


Leigh, Edward (Gainsbor'gh)
Nelson, Anthony


Lennox-Boyd, Hon Mark
Neubert, Michael


Lester, Jim
Newton, Tony


Lewis, Sir Kenneth (Stamf'd)
Nicholls, Patrick


Lightbown, David
Norris, Steven


Lilley, Peter
Onslow, Cranley


Lloyd, Sir Ian (Havant)
Oppenheim, Phillip


Lord, Michael
Oppenheim, Rt Hon Mrs S.


Lyell, Nicholas
Osborn, Sir John


McCurley, Mrs Anna
Ottaway, Richard


Macfarlane, Neil
Page. Richard (Herts SW)


MacGregor, Rt Hon John
Parkinson, Rt Hon Cecil


MacKay, Andrew (Berkshire)
Patten, J. (Oxf W &amp; Abgdn)


MacKay, John (Argyll &amp; Bute)
Pattie, Geoffrey


McLoughlin, Patrick
Pawsey, James


McNair-Wilson, M. (N'bury)
Peacock, Mrs Elizabeth


Madel, David
Portillo, Michael


Major, John
Powell, William (Corby)


Malins, Humfrey
Powley, John


Malone, Gerald
Price, Sir David


Maples, John
Proctor, K. Harvey


Marland, Paul
Rciffan, Keith


Marlow, Antony
Raison, Rt Hon Timothy


Marshall, Michael (Arundel)
Rees, Rt Hon Peter (Dover)


Mates, Michael
Rhodes James, Robert


Maude, Hon Francis
Rhys Williams, Sir Brandon





Ridiey, Rt Hon Nicholas
Thorne, Neil (llford S)


Ridsdale, Sir Julian
Thornton, Malcolm


Rifkind, Rt Hon Malcolm
Thurnham, Peter


Rippon, Rt Hon Geoffrey
Townsend, Cyril D. (B'heath)


Roberts, Wyn (Conwy)
Tracey, Richard


Roe, Mrs Marion
Vaughan, Sir Gerard


Rossi, Sir Hugh
Viggers, Peter


Sackville, Hon Thomas
Wakeham, Rt Hon John


Shaw, Giles (Pudsey)
Walden, George


Shaw, Sir Michael (Scarb')
Walker, Bill (Tside N)


Shersby, Michael
Walker, Rt Hon P. (Wcester)


Silvester, Fred
Watts, John


Skeet, Sir Trevor
Wheeler, John


Speed, Keith
Wiggin, Jerry


Spicer, Michael (S Worcs)
Wilkinson, John


Stevens, Lewis (Nuneaton)
Winterton, Nicholas


Stewart, Allan (Eastwood)
Wolfson, Mark


Stewart, Andrew (Sherwood)
Wood, Timothy


Stokes, John



Taylor, John (Solihull)
Tellers for the Noes:


Tebbit, Rt Hon Norman
Mr. Tim Sainsbury and


Thompson, Donald (Calder V)
Mr. Peter Lloyd.


Thompson, Patrick (N'ich N)

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Questions on amendments), and agreed to.

MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.

Resolved,
That this House notes the importance of higher education for the future of the country; commends the Governmen.t on the increase of 17 per cent. in full time home student numbers since 1979, on the 8 per cent. increase in the science budget for the research councils as measured against average inflation, and on the substantially increased opportunities for adult and continuing education; and applauds the Government's intention to build on these successes, particularly through further increases in participation rates for both young and mature entrants.

Firearms (Fees)

Mr. Clive Soley: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Firearms (Variation of Fees) Order 1986 (S.I. 1986, No. 986), dated 9th June 1986, a copy of which was laid before this House on 16th June, be annulled.
The debate, which is on firearms certificates, is one in which we want some clarification from the Government on what their intentions are. At one level, the order looks innocuous enough. The fees are being increased for certain categories of firearms and for certain purposes—[Interruption.]

Mr. Speaker: Order. Will hon. Members who are not remaining in the Chamber leave quietly?

Mr. Soley: But we are not sure whether the Government's intention is simply to raise the fees to pay for a service, or to raise the fees to restrict ownership of guns. That is not clear from the order.
I suspect that the Government are trying to have it both ways—they are trying to get more money for providing a service to the public but at the same time they are worried about the rising crime rate and rising armed crime, so they are concerned to restrict the availability of firearms in society. As I have said several times to the Minister in letters and conversations, and in questions at the Dispatch Box, there is a case for a sensible firearms policy that restricts the availability of firearms, but there is not a case for trying to control access to firearms simply by increasing the price. If one does that, one squeezes the low-income groups that use firearms. They are used for work —gamekeepers are an obvious example—and for sport, not just shooting animals and birds but for target practice, clay-pigeon shooting and so on.
We have not had from the Government a justification for the increase and, much more important, a proper, rational policy on the availability of firearms in society. In 1979, the Labour Government proposed certain increases. They fell, and then the present Government increased the fees by quite a large amount 1980. They proposed increasing them again in 1982.

Mr. A. J. Beith: The hon. Gentleman is not doing justice to the events that he is describing. Surely he recalls that the same hon. Members who voted down his Government's attempt to increase the charges then went through the Division Lobby in support of vastly greater increases after the election.

Mr. Soley: The hon. Gentleman has pre-empted me slightly, and also has the advantage of having been there at the time, which I was not. Without checking the names of all those who voted in the Lobbies at that time, I was under the impression that Conservative Members voted down an increase but then increased the charge dramatically. The present increases are well over 50 per cent. in several cases. For example, the charge for renewal of a firearms certificate goes up from 13 to £35, a dramatic increase, which is greater than the rate of inflation. As the hon. Member for Berwick-upon-Tweed (Mr. Beith) has just said, the increase is far greater than that proposed in 1979 when inflation was higher than it is today.
I am anxious not simply to question the Government as to whether they are trying to raise the fees to pay for a service or whether they are trying to restrict firearms; simply to bring forward such an order is not the answer to this serious problem. We must base our firearms policy on the premise that we do not use financial limits to restrict access to firearms. That would be one of the worst ways to achieve restriction. As I have said, that would hit the low income user who is a perfectly legitimate gun user. He should not be penalised simply because he does not earn a great deal or is unemployed. Using firearms for target practice or clay pigeon shooting is a very popular sport among many sections of society including low income groups.
The other criterion which we must consider—and I will address some points later to the shooting sports groups—is the recognition that we need to control the number of weapons available to society and the security under which they are kept in society. If our society had a low crime rate and there were no tensions in our inner cities and elsewhere, I would be less worried than I am today. In some countries it is fairly common for families and individuals to own guns and there is no evidence of a dramatic increase in crime as a result of that. However, we do not live in such a society. This is not Switzerland or a country where weapons are fairly common and at the same time the level of crime is low.
The crime rate in our country has been escalating dramatically. Under this Government, violent crime has been increasing rapidly, for reasons which I have eleborated upon previously. No doubt you would rightly rule me out or order, Mr. Deputy Speaker, if I went into great detail about this now. However, if we create a situation in our inner cities as a result of general economic and social policies that splinters the fabric of society, which undermines community links which prevent crime—

Mr. Deputy Speaker (Mr. Harold Walker): Order. The hon. Gentleman was quite right to anticipate me. I must remind him to return to the order before the House.

Mr. Soley: I will return to the order, but I ask you to bear with me on this point, Mr. Deputy Speaker. The increase in crime as a result of social policies has a link with violent crime. If we try to control the availability of weapons by putting up the price, that will simply hit the low income groups. That will not deal with the problems in the inner cities.
It is probably true to say—although the figures may be interpreted in other ways— that legitimate users do not, in any real sense, cause violent crime. However, if we allow the number of weapons to increase considerably in society, that will introduce a gun lobby into the United Kingdom. We have avoided that so far but it has not been avoided in the United States.

Sir Geoffrey Johnson Smith: rose—

Mr. Soley: Increasing the number of guns available to society would increase the difficulties faced by the police in tracking down weapons. There is considerable evidence that weapons illicitly used in our society either come from imports—which is probably their main source—or from people who have legitimate firearm certificates but who are prepared illegitimately to make weapons available, either by sale or other methods, to people who are not entitled to own them.

Sir Geoffrey Johnson Smith: I sympathise with one or two of the points which the hon. Gentleman made at the beginning of his speech. However, I believe that he is entering dangerous territory. I speak as the president of a rifle club and I do not represent a gun lobby. I am not aware that the increase in violent crime, or the use of firearms in this country to carry out crimes, is any way attributable to arms possessed by bona fide rifle clubs. Would the hon. Gentleman agree that there is no evidence of theft from such clubs to account for the increase in violent crime?

Mr. Deputy Speaker: Order. We should not go too far down that road. The order deals with the variation of fees and it would he out of order if the debate turned into a discussion of the incidence and causes of crime.

Mr. Soley: I agree with your sentiments, Mr. Deputy Speaker, but the argument is specifically about the purpose of the fees increases. If the Government are increasing fees to pay for a service, that is one thing, but there are suggestions that the Government are increasing the fees to keep down the supply of weapons. So there is a link.
I agree with you Mr. Deputy Speaker, that it would be wrong to have a debate on crime prevention, but I must tell the hon. Member for Wealden (Sir G. Johnson Smith) that I did not mention rifle shooting. I talked about guns generally and I am particularly worried about handguns and shotguns. Also, I did not talk much about theft. I said that it seemed to me that the main problems arose from imports and from people who legitimately held weapons, having a firearms certificate, being prepared to make those firearms available to others who were not entitled to own them.
There are no figures to support my case, but if the hon. Member for Wealden goes round certain inner city areas he will not have difficulty in buying weapons from various people, many of whom have firearms certificates. I cannot give the hon. Gentleman the figures—

Mr. Jerry Wiggin: Outrageous.

Mr. Soley: It is not outrageous. It is common sense and common evidence from those who live in inner city areas and from many of the things that the police say. I advise the hon. Member for Weston-super-Mare (Mr. Wiggin) to talk to the police. They will give him the sort of evidence that I am talking about.

Mr. Douglas Hogg: The hon. Gentleman has expressed his worry about the unlawful possession of shotguns. Will he tell us whether it is the policy of the Labour party to extend the firearms certificate system to shotguns—
Mr. Deputy Speaker: Order. I hope that the hon. Member for Hammersmith (Mr. Soley) will not respond to that invitation. He would be out of order if he did so.

Mr. Soley: You are right, Mr. Deputy Speaker. I should be straying outside the rules of order if I answered that question, but if the hon. Member for Grantham (Mr. Hogg) will listen to my remarks he will learn the answer to his question.

Mr. Wiggin: Will the hon. Gentleman accept that of the weapons involved in crime — which are, after all, traceable—only a fraction of 1 per cent. are recorded under the firearms certificate system? That is the point which—

Mr. Deputy Speaker: Order. The House is debating the Firearms (Variation of Fees) Order. That intervention has nothing to do with the order.

Sir Geoffrey Johnson Smith: On a point of order, Mr. Deputy Speaker. Conservative Members are in some difficulty, because we are worried about the cost of the Government's proposals, and some of us fear that they may he a ploy to get rid of the private owner in a vain effort to control all the illegal firearms that are used —

Mr. Deputy Speaker: Order. The hon. Gentleman is making assumptions about the order that are not matters for me. I am concerned about the order and the scope of the debate, which should be related to the merits of the proposed new structure for fees. The various matters that are being raised now are neither matters for me nor relevant to the order.

Mr. Douglas Hogg: Further to that point of order, Mr. Deputy Speaker. It is being suggested, and it has not yet been gainsaid, that these systems and fees can be used as a method of controlling the possession of firearms. That is manifestly correct; they can be so used. Surely we are entitled to debate the proposition that fees should he used as a method of controlling their possession.

Mr. Deputy Speaker: Order. That is not the matter that has been referred to either In the points of order or in the latter part of the debate.

Sir Hector Monro: Further to that point of order, Mr. Deputy Speaker. The nub of the argument about the increase in fees is that the police say that it takes a very long time to investigate each person.

Mr. Deputy Speaker: Order. I do not know what the nub of the argument is, because I have not yet heard it. It might help the House if the Minister were eventually to be given an opportunity to explain the purpose of the order. In the meantime, we ought to return to the debate and to the speech of the hon. Member for Hammersmith (Mr. Soley).

Mr. Wiggin: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Wealden (Sir 0. Johnson Smith) has rightly explained to the House that this debate is not simply about the amount of money that is involved. It is about the principle that underlies the order.

Mr. Deputy Speaker: The hon. Gentleman is proceeding on a point of order that proceeds upon an entirely false assumption. The order that is before the House deals with the variation of fees. Before we make assumptions about what the issue is, we ought to allow the Minister to explain the purpose of the order. Before he does so, we ought to listen to the hon. Gentleman who has the Floor of the House. Mr. Clive Soley.

Mr. Wiggin: Further to that point of order, Mr. Deputy Speaker. Surely you must allow me at least to finish the point of order that I have started. This issue is extremely important to many people. It is not simply a question of the amount of money that is involved. We must also deal with the arguments that lie behind the order. In all my experience of this place I have never listened to a debate about an order that simply relates to pounds shillings and


pence and not to the arguments that accompany it. I hope that you will keep a moderately more open mind about the debate that we must have on this important subject.

Mr. Deputy Speaker: Order. I think that one chairman at a time is enough. Mr. Clive Soley.

Mr. Soley: As you will recall, Mr. Deputy Speaker, some time ago I was making a speech. As I was aware of the nature of the order, I was trying to phrase my comments in a way that would be within the rules of the House and helpful to it. Although the order can be debated simply in terms of cost, you rightly pointed out that one of the difficulties of the Prayer procedure is that the Opposition have to lead the debate without first having heard the Minister.
I have already said that the underlying point is whether the Government are attempting to raise the fees in order to pay for the service or whether they are raising them in order to control the number of firearms. Within the rules of the House and within the limits of the order, I hope to describe the way in which the Minister should approach this problem instead of by an order that simply increases the fees. The availablity of firearms in society is an important issue. The rights of legitimate users of firearms are also important. By "legitimate users" I mean those who use firearms during their work or for pleasure. Those two uses must be kept in proportion.
Continuing from the point at which the trout rose to the evening fly, the shooting sports lobby needs to take on board society's concern about the increasing availability of weapons of all types, including crossbows and firearms. The Government need to take on board the fact that they must face the problem of how to deal with phasing the increases in fees and also the problem of how to control the number and type of firearms that are available.
On previous occasions I have written to the Minister about this problem and have pointed out to him that books are available on British bookstalls that advertise certain types of weapons. Not only do they do that, but they publish articles which advise people on how to use weapons in specific situations. One of the magazines I quoted had an article on how to turn a neighbourhood watch committee into a vigilante group. That magazine and a number of others of the same type are freely available in bookshops. They also describe how to get weapons and give details of the fees. I know that the Minister is aware of those things because I made him aware of them when I met him, and I also wrote to him recently.
Underlying this order is a legitimate concern of the Government: that at a time of dramatically rising crime, firearms and other weapons like crossbows and paramilitary courses that are advertised in the magazines that I am talking about, are freely and easily available in society.
On 26 February the Home Secretary said that he was setting up a review of the use of guns by the police. In response to that, I asked the Minister to include a wider review of the whole issue of' firearms—their availability, the costs of certification, and the conditions of security in which weapons were kept, and so on. In his written reply, the Home Secretary said:

When the review is completed I shall advise the House of its conclusions."—[Official Report, 26 February 1986; Vol. 92, c. 564.]
My letter to the Home Secretary on 26 March was about the costing of firearms certificates. I emphasise that. The answer to the question asked in the intervention by the hon. Member for Grantham (Mr. Hogg) is partly contained in that letter. My letter said:
We strongly recommend the establishment of a Standing Advisory Committee set up by the Home Office to review and make recommendations on such matters as firearm licensing; the number and type of firearms, replica gun and other dangerous weapons (crossbows, airguns and certain types of knife) in circulation; the number of registered firearm dealers; the growing trade in more general combat gear and training courses; the importation of firearms and other weapons; the use of weapons in crime; the minimum conditions of security in which legitimately held weapons are kept; the question of registering each shotgun with a number to ensure that they can be traced when necessary;
That point was raised by the hon. Member for Grantham. I emphasise this part:
and the desirability of creating a separate licensing authority to take the burden off the police.

Mr. Cranley Onslow: I am interested in the hon. Gentleman's idea of a Standing Advisory Committee. Will that have representation from shooting interests?

Mr. Soley: A lot of hon. Members and you, Mr. Deputy Speaker, are anticipating my speech. My answer to the hon. Member for Woking (Mr. Onslow) is yes, it would. I will come to that point. That Committee should have on it representatives — I emphasise the plural — of the shooting sports. Obviously, they should not form a dominant group but they should be on the Committee. A number of other people would be represented on it, including the police and criminologists. We are dealing with a complex subject and if the Government think they can get away from it by simply banging up the fees through an order which will slip through without a debate unless we in the Opposition pray against it, they are going down the wrong road.

Sir John Farr: I am endeavouring to follow the hon. Gentleman's argument. It seems to me that he would put shotgun certificates on the firearms certificate procedure. If his party were in office would it seek to limit the number of shotguns a person was allowed to own?

Mr. Soley: I make it abundantly clear that I would not legislate until I had received recommendations from the Committee that I have described. That is because the more I go into the subject. the more complex I see that it is. It is easy to make a simplistic judgment in this House or outside and to say that far too many guns are available. That view is basically right, but it needs to be argued in more detail in relation to the problems of crime in society.
It is also easy to go too far the other way, as the shooting sports lobby tends to do, and to say that there is no problem because all the people who hold guns legitimately are proper, decent users who stay within the law. That is too simple a view and I ask the shooting sports lobby to bear in mind the dramatic increase in armed crime. If we do not take that on board, we can end up only with more people owning arms, more arms being available —whether legitimately or illegitimately—and increasing the problem for society. We must deal with that problem in a much more sophisticated way than we are using tonight. That is the core of my argument.

Mr. Douglas Hogg: The hon. Member is being very candid, and we are grateful for that. As I understand him, he is saying that he and his party would greatly increase shotgun certificate fees to control the possession of shotguns.

Mr. Soley: I did not say anything which remotely resembles that. I think that controls must be of a different type. That is why I suggest the establishment of a standing advisory committee. By increasing fees, as is proposed in the order, we are hitting the legitimate low-income user. That is not a good way in which to control firearms. There is a case for controlling firearms and there is a case for saying that we will finance control out of the licensing system, but there is no case for increasing the fee to make it more difficult for low-income groups to use firearms.
To get around the problems, which we are all finding difficult, I recommend the establishment of a standing committee in the Home Office. The Minister would not then have to come to the House as he has tonight. We would have a much more informed debate and we might make better decisions as a result. There is a good case—I should not like to put it any more strongly at the moment —for a separate licensing authority. It is difficult for the police to tackle this matter without spending an awful lot of time on it, and there is dissatisfaction with how the police handle it. That may or may not be fair. I honestly do not know. I know, however, that if we tell firearms users that they must pay increased fees, they can legitimately reply, "We want some say in the type of service that we get." That is one of the reasons why I suggest that the shooting sports are represented on the advisory committee.
I have implied that the Government are at best confused and at worst deliberately confusing about their intention in the order. If they are trying to deal with the increase in armed crime, I acknowledge that there is a serious problem. The average annual use of long-barrelled shotguns in crime in the years 1974 to 1979 was 187. For the years 1980–84 it was 247. For sawn-off shotguns, the figure increased from 177 to 311. For pistols, it increased from 375 to 1,017. The average use of imitation firearms in crime increased from 86 to 130.
In those figures alone, we have a strong argument for setting up a committee such as I have described. The Government could then present the House with orders, which may well include fee increases, which would be well argued in terms of the services that are provided for legitimate users, and we could ask legal shooting sports bodies, as I have done already with individual groups, to adopt a more sophisticated and detailed argument of their case. It is not enough, as one or two have told me, to bring back capital punishment on the grounds that that will deal with armed crime. It will not. That argument is a nonsense. We need a well informed debate, whether it is about increasing fees or increasing the availability of arms.
My complaint to the Minister and my worry about the order it is that it simply increases the fees and covers over whether it is about a service or anxiety about the use of firearms and their availability. The Government have not addressed the central issue as I should have liked.

The Minister of State, Home Office (Mr. Giles Shaw): The House will understand my difficulty this evening. The hon. Member for Hammersmith (Mr. Soley) gave us a full

and generous account of the way in which a future Government — I was not entirely clear as to their composition—would tackle, not the firearms fees order, but the Firearms Act 1968, which provides the system by which controls are applied.
We must strike a balance between safeguarding the public from the misuse of firearms and the protection of the legitimate user. I am concerned only with the fees order and with the fact that the debate is limited in time. Therefore, I shall deal rapidly with some of the salient points that worry my hon. Friends. Unfortunately, I cannot deal with the Opposition's reasons for their prayer.
May I say for the sake of clarity, if not for the convenience of the hon. Member for Hammersmith, that the fees proposed in this order are strictly to recover costs and have not been devised to regulate the number of firearms legitimately held. Nor should they be taken as a moral predication for or against legitimate users of firearms or shotguns—the shooting fraternity. It is well known that the shooting fraternity has a substantial capacity to use, control and look after firearms and shotguns, because its members are properly devoted to their sport.

Mr. Douglas Hogg: We are all delighted to hear tha: my hon. Friend is trying only to recover costs. How does he justify an increase of 65 per cent. in the context of replacing firearms certificates? Was the 1980 level too low, or has there been a 65 per cent. increase in the cost of processing applications.

Mr. Shaw: As usual, my hon. Friend precedes me by a short time. Had he listened a little longer, he would have heard the answer to his question.
Governments of both persuasions have long believed that a person who wishes to engage in an activity that is controlled in the public interest should pay the economic cost of issuing or renewing his or her licence. The inescapable fact is that income from firearms fees does not match the expenditure of the licensing system.
My hon. Friends will know the background to the order. They will recall the criticisms made of the proposal to increase fees in 1982, which was mentioned by the hon. Members for Hammersmith and for Berwick-upon-Tweed (Mr. Beith). That proposal was not proceeded with, but it is interesting to note that the fees proposed then—four years ago — were £41 for the grant and £30 for the renewal of a firearm certificate, with corresponding fees of £17 and £10 for shotgun certificates. My noble Friend the then Home Secretary was urged to introduce some standardisation of practice among police forces in their administration of the Firearms Act in an effort to keep costs down.
The Government reacted positively. In 1982 — as many of my hon. Friends will know, but as the hon. Member for Hammersmith conveniently forgot— we set up a joint Home Office and Association of Chief Police Officers working party to consider what improvements could be made to streamline and reduce the amount of work undertaken by the police. In its report, published in April 1984, the working party made several important recommendations, most of which have been implemented. It also drew up a series of standardised procedures—it was previously a major source of disagreement in the shooting lobby, which required a standardised procedure if at all possible — in the form of worksheets and


recommended that they be used in reviewing the level of fees to recover costs. They showed the stages of processing an average application and the most junior rank of officer who might perform each task. The fees have been costed strictly on the basis of those worksheets, with the exception of the shotgun issue and renewal fee.
Under the new costing method—I stress that it is new—some fees have been reduced and others will remain at their 1980 levels. There would have been a slight reduction of £2·50 and a slight increase of 50p in the shotgun issue and renewal fee, but since the one would have balanced the other in terms of cost recovery, we have decided to leave both at their existing levels for the present. In any event—I hope that I carry my colleagues with me on this—we do not think that it would be in the public interest to reduce the shotgun issue fee at present. I must agree with the hon. Member for Hammersmith that there is public anxiety about the use of shotguns in the commission of crimes.
In 1975, 673 burglaries and thefts were recorded by the police in which shotguns were reported to have been stolen, and some 766,000 certificates were issued. In 1984, the equivalent figures were 678 and 798,000. Therefore, there is nothing to suggest that the rise in the number of certificated shotguns is related to an increase in the number of shotguns that find their way into criminal activities.
I turn to the matter of most concern to my right hon. and hon. Friends.

Mr. Soley: I have been trying to follow what the Minister has said. Why has he rejected the ACPO recommendation that the fee should be reduced?

Mr. Shaw: That recommendation was rejected for the two reasons that I have given. First, this would signal that people could then expect to obtain shotguns more easily, and one would have to consider whether that was in the public interest. Secondly, the decrease to £9·50 on the £12 fee, and the increase to £8·50 on the renewal fee, cancel each other out.

Mr. Wiggin: rose—

Mr. Shaw: I am trying to answer the point raised by my hon. Friend the Member for Grantham (Mr. Hogg), but I shall give way to my hon. Friend.

Mr. Wiggin: Does my hon. Friend accept that his Department has an extremely bureaucratic attitude towards the issue of licences? Licences could be issued more efficiently. For example, a yachtsman obtaining a licence to save his life pays something like that fee for sending a piece of paper through the post every year. If my hon. Friend looked at that point within his Department, he might solve the problem that he faces tonight.

Mr. Shaw: I am not absolutely certain that I am surrounded by a massive problem that I cannot deal with. However, a not unreasonable response to that request would be to set up a working party to examine how many minutes are required to process fees, and to base a proposal precisely on that. The information has been published since 1984, so my hon. Friend should understand the minutage required for renewal. As laid down in the Firearms Act 1968, the renewal is required to be on exactly the same terms as the grant under the 1968

Act. The grant and renewal have been costed on the basis of a standardised procedure, which is what the British Shooting Sports Council would wish. The time arrived at is 145 minutes. [Interruption.] My hon. Friends are now pulsating with excitement, because they cannot believe that the working party could come up with that figure.

Mr. Wiggin: Will my hon. Friend give way?

Mr. Shaw: Of course, but for the last time.

Mr. Wiggin: The other day I had my firearms certificate renewed. The very worthy constable, who is a good friend of mine and a helpful fellow, was forced to write out a lot of information in longhand, and in a most appallingly out of date and bureaucratic manner. The most modest computer, costing only a few hundred pounds, could do it.

Mr. Douglas Hogg: It did not take 145 minutes, anyway.

Mr. Wiggin: It did not take five minutes. It is ridiculous, and bureaucratic nonsense, that that should cost £33.

Mr. Shaw: I would be more prepared to bear in mind my hon. Friend's splendidly delivered strictures if, in 1984, when the working party report was published and circulated to the shooters, he had expressed an opinion about it. For some extraordinary reason, he did not. After two years, we have come to put the working party's recommendations into fee form, and now he has spoken.
I know that my hon. Friends are concerned about this, and my hon. Friend the Member for Weston-super-Mare (Mr. Wiggin) has made that clear. The Firearms Act 1968 requires a chief officer to be satisfied that the applicant for renewal has a good reason for having the firearm, and can be permitted to have it in his possession without danger to the public safety. Those are the inquiries on which the minutage is spent.
In dealing with firearms, we are dealing, as we all know, with the senior category of weapons of greater lethal propensity than others. It does not seem outrageous that, after a three-year interval, a renewal should be conducted on the basis of ensuring that there are no changes in the arrangements that were made three years previously, in the conditions under which the firearm should be used, in the land over which it should be used, in the total number of firearms and their individual numbering. The police should also find out whether there are any additions to or subtractions from the requirements of the certificate holder. All that would take a police officer some time.
The fee increases that are being debated are the first for six years. My hon. Friend the Member for Weston-superMare has to recognise that costs have risen over that time. My hon. Friend may agree that the costs of police time have risen, and that this factor should be taken into account. Costs have to be reflected in the fees that we set. A firearm and shotgun certificate is issued for three years, and the increases for the issue and renewal of a firearm certificate before us amount to approximately £3 and £4 per annum. The shotgun fees are to remain the same. I cannot accept that the net effect of this package will be to price the shooter out of his chosen sport, but I believe that we shall begin to see a full recovery of the costs involved in issuing the certificate. This is all that we are seeking to do.
My hon. Friends have rightly drawn attention to the fact that the biggest single increase is the 65 per cent., so elegantly pointed out by my hon. Friend the Member for Weston-super-Mare, for the renewal of category I firearm. That is based on the assessment made by the working party of the minutage involved, at the lowest cost of police officer to ensure that it is as fair as possible. I am prepared, and I have told the British Shooting Sports Council so to invite it to join us in a working party during the process of the fees being enacted. It will be up to the working party to re-examine the work sheets that we are providing as the basis for the renewal fee of the category I firearm. If it can find that the average timetable in the 43 police forces in England and Wales, whose good offices have been used to arrive at this proposal—

Sir Hector Monro: And Scotland.

Mr. Shaw: And Scotland, as my hon. Friend rightly reminds me. If the working party can show that the 145 minutage is an excess, we shall have to consider that in the renewal of the fees order, which will doubtless be before the House in three years' time.
Tonight, we have to consider fees that have not been altered for six years, and the totals show that the recovery of costs is the sole basis on which we seek to judge them. The working party reported two years ago, recommending that the cost be related to the minutage involved, and that is a not unsensible basis on which to proceed. I trust that it might at least assume proportion in the minds of hon. Members as a significant step forward from the several haphazard bases from which previous fees were calculated, and which resulted in such substantial opposition from the shooting lobby. I have seen the BSSC recently, and I know that it is concerned about the renewal of the firearms licence.

Mr. Nicholas Lyell: I welcome the offer of a working party, but will my hon. Friend simply add one point? It is that the working party will have the benefit of the supervision of my hon. Friend's jaundiced good sense, not only as to the length of time that it takes to fill in the many forms, but also as to some commonsense in the questions that are asked and the procedures that are gone through to satisfy the proper authorities that the right person has the right type of weapon in the right conditions. It seems to some of us that proceedings are often prolonged in the courts.

Mr. Shaw: My hon. and learned Friend the Member for Mid-Bedfordshire (Mr. Lyell) will recall that the basis of the fees is set in the Firearms Act 1968. In following the procedures for the granting and renewal of category I firearms, we have to follow the correct procedure. That is the statutory position and it is not possible to vary it without primary legislation.
I hope that what I have said will allow the prayer to be defeated.

11 pm

Mr. Stephen Ross: The Minister is a very nice man, but he spoke from a rotten brief. He did much better many years ago when he abolished the Swansea licensing centre. I wish that he would deal with this matter in a similar manner.
I am not a sportsman and I do not have a shotgun, but I have a great interest in small-bore rifle clubs. They have suffered badly under such orders ever since I came to the

House. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and I helped to defeat the Government in 1979. We are stuck with an increase of .E.33 and a renewal fee of £33. This affects not people on high wages but those who may have taken a cut in salary in the last few years.
I have visited the Shanklin small-bore rifle club and my hon. Friend the Member for Berwick-upon-Tweed has had representations from the Northumberland rifle club. We are talking about a legitimate sport. It is a keenly fought sport. I have travelled with club members. Why should we penalise it? Why can we not renew a licence for six years, as I proposed during the review? Why can we not give a club an overall licence? Why cannot people with shotguns pay for one licence and renew it at the same time? That would cut out some of the ridiculous costs.
We have heard statistics about the cost to the Metropolitan police of renewing licences, compared with the cost for the Isle of Wight and Wiltshire. There are vast variations, so the Minister will have to do much better to convince us that police time costs so much.
I ask the Minister to think again. It may be six years since the matter was reviewed. Inflation has increased, despite this Government's record, which we have to admit is quite good, but I ask the Minister to think about the people who enjoy the sport and to do something to help them, instead of crippling them all the time. The number of licences issued has gone down by about 50,000 since 1968, so it is obvious that people have had to give up the sport because they cannot afford it. Can we please look after small-bore rifle club members better than we have done in the past 12 years?

Sir John Farr: I welcome with moderation what my hon. Friend the Minister of State has said. I shall be brief as time is short and a number of hon. Members wish to contribute to the debate.
I welcome the system that has been introduced because it will eliminate variations in charges. We have opposed increases in the past because of the wide variations and fluctuations in charges by different forces. Before the new system was established, it cost three or four times as much to be issued with a firearm certificate in London as it did in Wales or on the Isle of Wight. That was manifestly unfair. I think that the House should welcome what my hon. Friend has done through the working party. We have a detailed costing system which is fair to everybody and has resulted in a standstill in shotgun certificate fees. Indeed, there has been a reduction in charges in the light of the proposals of a previous Home Secretary in 1982, which, in his wisdom, he withdrew.
The strange increase in the cost of renewal of a firearm certificate stands out like a sore thumb. I can understand the issue of a certificate being quite a lengthy and expensive procedure, but once it is known that the man who has the certificate will not flit overnight and has been at the same address for 20 or 30 years, there is no reason why the cost of renewal should be the same, as is proposed in the order, as the cost of issuing it. I hope that my hon. Friend will put in hand straightaway his suggestion to take up this matter with the British Shooting Sports Council and shooting people so that it can be ironed out.
As has been said by some of my hon. Friends, it is to be hoped that some form of modernisation, including computerisation, can be introduced to the system. Can we look forward to a day not too far distant when firearm fees


will be at a standstill, or will be reduced? That is what we are looking for as regards rates, and we are in a period when the cost of living is almost stable. The Home Office is out of step when it churns out massive increases in firearm certificate fees year after year.
I reject the suggestion of the hon. Member for Hammersmith (Mr. Soley) that there is a link between armed crime and legitimate firearm owners. Expert statistical research has shown that there is no such link, and police officers will confirm that.

Mr. Soley: rose—

Sir John Farr: I shall not give way to the hon. Gentleman. He has spoken for too long already. When he reads the Hansard report of his speech, I think he will regret many of the things that he said.
I ask my hon. Friend the Minister of State to bear in mind the good suggestion made by a previous Home Secretary, that a six-year certificate should be introduced for shotguns and firearms. Would that not be a way forward? Would not that lead to a large saving in administrative costs and a considerable reduction of the burden which shooting people have to face? I ask my hon. Friend with great sincerity to consider that suggestion carefully. I have the detailed proposals in my possession somewhere and I shall gladly send them to him to refresh his memory. His predecessor was convinced that his suggestion was a sensible and economic step which should be taken in the interests of the country.

Mr. Ron Davies: Like the hon. Member for Harborough (Sir J. Farr), I shall be brief. I must, however, take up his reference to my hon. Friend the Member for Hammersmith (Mr. Soley) and his assertion that he claimed that there was a link between armed crime and legitimate firearm holders. That was not my hon. Friend's argument. It was the Minister who, when questioned by my hon. Friend, said that there was increasing public anxiety about the illegal use of firearms. When the Minister replies, I invite him to confirm that that was the position.

Mr. Beith: Does the hon. Gentleman recall that the Minister went further than that? He said that to put into effect the recommended reduction in the shotgun licence fee would be to give a signal that it was easier to obtain shotguns—a contention which I refute.

Mr. Davies: That was precisely the point that my hon. Friend the Member for Hammersmith took up. My hon. Friend wanted to know whether that was the Minister's contention.
I have received representations from some of my constituents who are organised in a small shooting club at Senghennydd. It is a good club which has several hundred members, many of whom are on low incomes or unemployed. My constituents have two grievances. First, they believe that there has been inadequate time for representations to be made on the order.
The Minister said that it has been six years since the matter was last debated. It was last debated in the House in 1980. The working party has been sitting for four years, and its report was published in 1984. It seems strange that suddenly the Home Office has to lay the order before the

House and push it through at this late hour without public debate. It may well be that the Minister is receiving advice from his hon. Friend, the Parliamentary Under-Secretary of State for Scotland, the hon. Member for Argyll and Bute (Mr. MacKay). I must tell the Minister about the reaction of people who will be directly affected by the proposals.
The order imposes a 65 per cent. increase in the renewal fee. There is no getting away from the fact that that will place a major burden on those low income earners who regard shooting as their prime sport. If the Minister wishes to use the licensing system to control the spread of firearms, and so on, he must accept that the proposed fee increase will adversely discriminate against low income earners and will do nothing to prevent the illegal use of firearms.
The Minister was challenged on the question of shotguns. He said that he did not want to give a signal that there should be wider ownership of shotguns, presumably because of public fear about the increasing use of shotguns in crime.
I understand, from discussions I have had today with Home Office officials that anyone who holds a foreign passport will be exempt from all the provisions. A person can come to this country, go to a dealer or a sports shop, show his passport, and say, "I will not be a resident of this country for more than 30 days", and he will be exempt from the provisions. He does not have to go to a police station to register. He does not have to get authorisation to buy ammunition. As long as he produces his passport and gives an undertaking that he will leave the country within 30 days, he will be exempt from the provisions.
How can the Minister justify his earlier comment that he does not want to give a signal about the wider ownership of shotguns when citizens of the Irish Republic, North America, and so on, can come to this country—

Mr. Beith: And Libya.

Mr. Davies: And from Libya —and have unfettered access to shotguns?
Will the Minister confirm that there is an inadequate method of control over shotguns which are imported by British citizens who can go to Spain, Switzerland, and so on, and buy weapons quite freely on the open market? When they return to this country—perhaps at Heathrow airport — and declare that they have a shotgun certificate, they are not required to produce any further evidence to Customs about the weapons they have brought in. They are not required to provide the serial numbers of weapons to Customs or to the police.
When there are such major, glaring loopholes, the Minister may understand why genuine holders of certificates and genuine users of shotguns and firearms in my constituency, who comply with the provisions of the Act, feel aggrieved when they face a 65 per cent. increase in fees just so they can continue to enjoy their proper, legitimate and controlled sport. I hope that the Minister will address himself to those major questions.
I find it difficult to accept the Minister's argument that the fees are calculated on the basis of costing police time. That does not apply in other areas of crime prevention. When the police go out and give advice on home security or road safety, we do not expect them to charge for doing so. The Minister is trying to draw a smokescreen over the


issue. I think that he wants to control the use of shotguns and the spread of firearms by a financial method. I hope that he will come clean, when he stands at the Dispatch Box, and say that is the case. He loses credibility when he tries to construct an argument on the basis that the police have carefully costed how much time is involved in the issuing of certificates or renewals.
The following example demonstrates that point. The South Wales police force takes, on average, three days to deal with an application for a variation. There have been no complaints about that police force or about the legitimate shooters who must deal with that police force. I have it on good authority that one applicant, in the county of Gwent, had 14 visits from the police when they were processing his application for a variation to his firearms certificate. When there is such a discrepancy between two neighbouring police forces, how can the Minister expect us to accept that there has been a careful, objective analysis to produce the median figure of 145 minutes as the time required to process applications? That is not on. All the evidence suggests that such a period is not needed. I ask the hon. Gentleman to reconsider.
I welcome the Minister's move to consult more widely the representatives of legitimate sporting interests. I ask him to give careful consideration to the suggestion of my hon. Friend the Member for I lam mersmith, because, if he is prepared to accept it, he will go a long way towards resolving this problem.

Sir Hector Monro: My hon. Friend the Minister made his usual kindly speech, but I am afraid that it was throroughly unsatisfactory in relation to the renewal of firearms certificates. I speak from both sides of the sport. I am interested in country sports and am involved in the Clay Pigeon Shooting Association and the National Rifle Association. I accept that the variations are reasonable, except the incredible increase from £20 to £33 for the renewal of a firearms certificate. It is remarkable that the fee has increased by 65 per cent. when the Government have taken credit for bringing inflation down to 3 per cent. The increase is a knock on the head to those interested in enjoying a legitimate country sport.
The increased fee to renew a certificate is the same as the cost of the initial application for a certificate, which has increased by "only" 32 per cent., from £25 to £33. That is a large increase for a sport which should be encouraged at a time when we are doing all that we can to step up interest in sport and recreation.
I ask my hon. Friend the Minister to bear in mind that, in 1968, the fee for the initial application for a firearms certificate was five shillings and renewal cost half a crown —the initial application cost about 50 per cent. of the renewal cost. That was not at all like the increase now recommended.
I cannot understand why the nation is not prepared to bear a share of that cost. As the hon. Member for Hammersmith (Mr. Soley) said, there are many other police activities, the costs of which will be not be recoverable from those who benefit from their intervention.
My hon. Friend the Minister has made much of the interpretation of the Firearms Act 1968. It has exactly the same wording as the Firearms Act 1937. How could the police manage for 49 years on the interpretation of the 1937 Act before they suddenly had to look at the

procedure for renewing firearms certificates? What made the police change their minds about the interpretation of the 1937 and 1968 Acts?
We have referred to the fear of weapons falling into the wrong hands. The whole shooting world shoulders particular responsibility for weapons. After all, the owner of a valuable weapon is not going to have it stolen if he can possibly avoid it. I assure my hon. Friend the Minister that security is a high priority for all those who own shotguns or rifles, because they love them almost as much as their wives. Do not think that owners will throw their shotguns or rifles about in the street and let them he picked up or stolen by undesirable characters.
We have a duty to probe my hon. Friend the Minister on why the police believe they must have 145 minutes to renew a certificate. As my hon. Friend may know, I am the chairman of the police committee and therefore on the side of the police. I find it impossible to understand how the average time works out at 145 minutes, as announced by my hon. Friend. Why is it necessary to have a completely new certificate every time it is renewed? Why can we not just have a space at the bottom of the form to renew it for another three years? That would save about 20 minutes typing. Why do the police not use the telephone to ring up rifle club secretaries to ask whether Mr. X is a member? Why can the police not ring up the applicant and ask whether he is at home before they go on a fruitless visit? There are many ways in which we could reduce that 145 minutes at least by half, by administrative efficiency in working out the procedure.
I think that the Minister is quite wrong in saying that it will take three years to find out whether the 145 minutes is right. Any efficient police force could halve the time if it made the effort and had the wish to do so. I have some doubt as to whether the Minister and the police understand that we would like firearms certificates issued less expensively than under the present procedure.
There are other issues outside the order, such as the territorial interest the police show as to where one may use a weapon. If one is stalking roe deer or red deer one cannot say one is going to shoot until one is given an invitation to do so. Therefore, it is difficult to say in advance.
Since 1980, retail prices have increased by 46 per cent. The firearms certificate renewal has now gone up 65 per cent. Can my hon. Friend give us an assurance, not that he is setting up a committee, but that he will look at the increase in the renewal fee for firearms certificates again and come back to the House with a further variation order on that one issue? Tonight we should be encouraging shooting as an admirable pastime, but the Minister is doing something to make it totally restrictive. I hope that he will look at it again, and say so, if he wants our support.

Sir Geoffrey Johnson Smith: I warmly concur with the sentiments expressed by my hon Friend the Member for Dumfries (Sir H. Monro). Shooting is a worthy sport and one that has been horribly penalised by the order. I especially urge my hon. Friend the Minister to consider coming back to the House with a new order in respect of renewals.
It is an expensive sport, but it is worthwhile. In the last Olympic games our four shooters won four medals. No other group achieved 100 per cent. success. I have had representations from people who are hopping mad. Three rifle clubs in my constituency have written not with


bitterness, although they are very angry, but with constructive proposals, some of which have been mentioned tonight. I have heard from the Uckfield rifle club. The Felbridge rifle club, of which I am president, has been joined by an ancient and distinguished club in my constituency, the Uckfield (1944) Home Guard rifle club. We could not have more worthy citizens than those who belong to those clubs.
The facilities they use, particularly the Felbridge range in East Grinstead, are privately owned. They pay their own rates and are not a drain in any way on the finances and facilities of the local authorities. It seems to them that these proposals are penalising the legitimate owner. It is little wonder that one letter said that they felt this was a ploy to get rid of the private owner and that the police were behind it. These are honourable, law-abiding citizens who do not wish to be anti-police but they simply do not understand, any more than any of us, do, why it takes so darn long to process renewals. After all, one can get a vehicle registration replacement document for £2, so why is there this huge cost?
Therefore, I add my plea in the strongest terms I can command that the validity of the firearms certificates should be extended, police procedures should be streamlined and we should remember, above all, that this is a sport in which we can excel, in which we want to excel and which we want to encourage our young people to enjoy.

Mr. Peter Griffiths: I fear that the comments made by my hon. Friend the Minister of State will fail to convince or satisfy people in my constituency who take their shooting seriously, and take their lobbying of their Member of Parliament on those occasions equally so.
My constituents will not be so concerned as to whether the fees that have been announced reflect a just cost for a particular procedure; they will be concerned that so cumbersome and expensive a procedure is followed, which leads to such high fees. I draw to the attention of my hon. Friend the Minister the experience of New Zealand, where it is possible to administer a satisfactory system without so cumbersome a process and so large a cost.
I have attempted to say to my constituents that I would be willing to support increases in fees that represented the true cost of the processing of the applications, but it will be extremely difficult for me to explain to them how it can cost the same amount to renew or repeat an application as to make the original application, which requires a great deal more inquiry. It is not possible for me to say to my constituents that those two fees represent the costs. It does not make sense.
Therefore, I do not feel that the Minister can take credit tonight for having introduced an order that we can support. If there were a Division, some of us would be tempted to support the Opposition prayer.

Mr. Douglas Hogg: This debate once again illustrates the unsatisfactory nature of the procedure that we are adopting. One thing is wholly plain — that we have either to accept or reject the order. We cannot amend it, yet the House feels that an increase of 65 per cent. In

respect of renewal is unreasonable. It is a great misfortune that we cannot strike out that provision and accept the rest. We are not able to do so, and that is a misfortune.
I welcome one part of my hon. Friend the Minister's speech: his assurance that what he is about is recovering costs, not seeking to control the possession of firearms and shotguns through the fees system. But that raises the further question, of whether he should be charging fees at all; and, if he is, on what basis. I do not object to his charging fees, but I object to his attempting to do so on a cost basis, because, as has been said by other hon. Members, there are many services that the police provide in the public interest and it is rare that the user is obliged to pay the full commercial cost. I challenge the basis of that. In any event, I also challenge the calculation because it is passing strange to think that one has to take up 145 minutes of a chief inspector's time. I assume that it is a chief inspector, because of the high fee charged.
One matter that I am pleased about is that the Minister of State has—[Interruption.] I know that he is looking at the clock. He will have to wait a bit. One thing that I am pleased about is that my hon. Friend has not increased the fee for the shotgun certificate. That is a good thing for the people of Lincolnshire, who are already fed up with a variety of things—for example, the proposal to site low-level nuclear waste—

Mr. Deputy Speaker: Order. The hon. Gentleman should speak to the order before the House.

Mr. Hogg: I was merely pointing out that the people of Lincolnshire have quite a lot that they are fed up about. They would be even more fed up if there were an increase in shotgun certificate fees. I welcome that part of my hon. Friend's statement.

Sir Eldon Griffiths: I wish to speak for only 30 seconds, and I am obliged to my hon. Friend the Minister for allowing me to do so.
I shoot. I am president of various shooting clubs, and represent probably as many shooters in my constituency as anybody else in the House. I also represent the police. They want to prevent people from having such easy access to shotguns. However, they do not think that pricing them out is the right way to do it. I do not believe that it needs to take so long for police officers to carry out inquiries for renewing the shotgun licence. I hope my hon. Friend will say that, when he sets up his committee, he will allow some policemen to work with the shooting fraternity to see whether we can reduce the number of hours required for renewal.

Mr. Giles Shaw: rose—

Mr. Deputy Speaker: Does the Minister have the leave of the House to speak again?

Hon. Members: Aye.

Mr. Shaw: My hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) should not forget that policemen were on the initial working party.
With regard to what my hon. Friends seek, I cannot agree to amend the order because it is impossible under our procedure. I cannot agree to withdraw the order. We are looking at the order in total. It represents a package in which there are many reductions, including a 68 per


cent. reduction in the fee for replacement of firearms as well as the significant increase about which my hon. Friends are most concerned.
I have offered to examine that point with the shooting fraternity and with the police in a way which should prove that the 145 minutes set out in the 1984 working party report is a sensible measure. If it is not sensible, we will agree to bring forward, at the appropriate time, reductions in the firearms renewal fee.
I must tell my hon. Friends that, bearing in mind the last review of fees and the composite nature of the order before the House today, it represents a reasonable attempt to standardise these procedures. I trust that the House will support it.
Question put and negatived.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) on Statutory Instruments. &amp;c.

HORTICULTURE

That the draft Horticultural Development Council Order 1986, which was laid before this House on 3rd June, be approved—[Mr. Durant.]

Question agreed to.

BUSINESS OF THE HOUSE (ESTIMATES)

Ordered,
That the first day allotted this Session under Standing Order No. 19 (Consideration of estimates) be deemed to have been a half day as provided by that Standing Order.—[Mr. Durant.]

Copyright

Motion made, and Question proposed That this House do now adjourn—[Mr. Tony Durant.]

Mr. Alan Howarth: In addressing the question of ownership of copyright in commissioned works of art, I would like to refer briefly to that great historical figure. William Hogarth's success during his lifetime was such that pirates paid him the compliment of copying his work for money. Indeed, so popular were his engravings that even pirated editions were themselves re-pirated. Hogarth, of course, did not receive a penny for this exploitation of his works.
Hogarth was a man of business acumen as well as an artist. He therefore set about devising a rule which would protect his work and that of fellow artists. He argued that the artists or producer—the person we now refer to as the author — should be allowed to control the reproduction of that work.
In 1735, Parliament enacted a law of copyright known as Hogarth's Act, under which no one was allowed to make copies of a work without the artist's consent. The modern expression of that principle is enshrined in the Copyright Act 1956. Section 4 of that Act, establishes the basic rule with regard to the legal ownership or the copyright in literary, dramatic, musical and artistic works. The rule is that the author of a work shall be entitled to any copyrights subsisting in the work.
Before I consider the special difficulty for visual artists thrown up by an exception in this Act to the general rule, I would like to consider further our international obligations. The United Kingdom is a member of the union established to protect the rights of authors under the Berne copyright convention. Article 9 of the convention expressly states that authors of literary and artistic works protected by the convention shall enjoy the exclusive right of authorising the reproduction of these works.
It is laid down in article 2 of the convention that the protection of literary and artistic works shall operate for the benefit of the author and his successors in title. By "author," is meant the person by whom the work has been produced, a construction which the English courts have adopted for copyright purposes.
The Government have made it plain in the recent White Paper on copyright entitled "Intellectual Property and Innovation" that they intend to ratify the Paris text of the Berne convention. Indeed, it is plain from the welcome inclusion in the White Paper of new moral rights for authors that the Government are fully conscious of their international obligations under the Berne conventionn. No doubt my hon. Friend the Minister recognises that the provisions of the convention are supposed to be enforceable in the countries of the union at the suit of the author or his successors in title. In the United Kingdom, the law of copyright is the vehicle through which the requirements of the Berne convention are carried in to effect.
It follows that anything in our domestic law of copyright which tends towards the involuntary transfer of rights by an author ought to be examined most carefully to ensure that authors are not denied the benefit of the protection contemplated by the Berne convention.
The White Paper has been warmly welcomed as offering much needed simplification in the law relating to


industrial patents and designs. It has also been admired for its modernising spirit embracing the new technologies of intellectual property including computer software. It is all the more surprising, therefore, that the White Paper should propose to leave unammended the provision in the Copyright Act 1956 which has the effect of automatically removing from artists the copyright in their work. It is not only a repudiation of the spirit of William Hogarth—it is perhaps fortunate for my hon. Friend the Parliamentary Under-Secretary of State for Trade and Industry, who is to reply to the debate, that William Hogarth is not in position to retaliate with one of his devastating caricatures —but it is wholly contrary to the requirements of the Berne convention.
The provision in question is section 4(3) of the Copyright Act. Although the Act embodies the general rule that the author of a work is the first owner of copyright, there is in a section 4(3) an exception to the rule, which provides that when a person commissions a photograph, a painted or drawn portrait or an engraving, the commissioner and not the artist is entitled to the copyright in the work. In a nutshell, the provision means that the artist has to bargain to get back what should belong to him as of right. That is invidious and insupportable, and in the forthcoming legislation we shall have the opportunity to remedy it.
Not only are the anomalies contrary to our international obligations under the Berne convention, hut, for practical purposes, connected with the economic activity of Britain's artists, they are eccentric and are inconsistent to a degree that has mystified artists for many years. It is indeed timely that, before the Bill that will follow the White Paper is introduced in Parliament, the Arts Council, backed by the Royal Academy, has made a most vigorous and detailed case on the matter to my right hon. Friend the Secretary of State for Trade and Industry. I hope that my hon. Friend the Under-Secretary will be able to tell the House that he has pondered the Arts Council's case—I am sure that he has done so—that he acknowledges the expert legal and artistic opinion that has been placed before him and that he will endorse the striking out of section 4(3). In so doing, he would add not a jot to public expenditure but would ensure conformity with European law and adherence to the requirements of the Berne convention. He would also give a signal to the arts world that, in attending to pressing matters involving industrial copyright, the Government have not overlooked the economic interests of our native artists, who are much admired throughout the world.
It is a mystery why photographs, portraits that are drawn or painted, and engravings, which include etchings, lithographs, woodcuts and other printing processes, were singled out for exceptional treatment earlier in the century. Certainly the list appears arbitrary to modern eyes. Why, for example, are sculpted portraits not included?
It is reasonable to ask what motive there might have been for the statutory exception. It is said that the justification for section 4(3) was a perceived need to preserve the privacy of family archives and personal mementos, but it does not follow that the right way of remedying the supposed deficiencies in the law is to deny copyright protection in the United Kingdom to authors of

commissioned photographs, portraits and engravings whose patrons have not specifically agreed that they should have it.
The abolition of section 4(3) would not prevent those whose privacy was flouted from seeking a remedy in actions for breach of trust or confidence. It would be better still if we had a generalised law of privacy in the United Kingdom. Moreover, the protection of privacy is hardly a consistent theme of the subsection. All photographs are included inthe list of commissioned works, whether or not they are of a private and personal nature. That results in the odd circumstance that, if a person commissions both a photographer anda painter to produce pictures of his house, he will automatically own the copyright in the photograph, butnot in the picture on canvas. But if the pictures commissioned were portraits of his mother-in-law, he would automatically own the copyright in both works.
The net effect of the subsection is to muddy waters which should be as clear as the general rule is already—the artist is deemed to own the copyright unless he decides to assign it voluntarily to someone else. It will not do to say that the artist who is commissioned to take a photograph or make a portrait should be required to insist on the express assignment in writing of the copyright every time. It should, rather, be the other way round, as is the case with landscapes and all other classes of commissioned literary and artistic works that are not covered by the subsection.
As Mr. Justice Whitford observed in his report on copyright in 1977:
the commissioner can protect his position by express agreement.
In other words, the ownership of copyright can be part of the bargain struck between the commissioner and the artist, but where no contract exists the presumption should be, as elsewhere— namely, that ownership of copyright vests in the artist. The House will recognise the justice of that when it considers how weak, generally speaking, is the bargaining power of artists compared with that of their patrons.
The anomalies of this subsection of the current law work directly against the interests of artists in this country. The subsection applies, regardless of whether the commissioning party intends to keep the commissioned work confidential, or to exhibit it publicly, or to exploit it commercially. The subsection often results in the curious situation in which the commisioner owns the copyright in a photograph or an engraving and the artist owns the means by which to exploit it — in other words, the photographic negative or the engraved plate.
The subsection applies, regardless of whether the commissioner is the person whose privacy it may be disirable to protect. The subsection is arbitrary in not applying to other forms of commissioned works, which by their nature may be no less deserving of protection under a proper regime of privacy. I have mentioned sculpted portraits. Why not confidential art work or illustrations that are not portraits? In these cases, the artist is deemed to own the copyright, yet we hear of no grave difficulties for commissioners.
This subsection applies, even though the authors of these types of commissioned works have not voluntarily transferred, or may not have wished, or intended, to transfer their copyright in the United Kingdom to the commissioner. So we have the principle, inconsistently


established, of a copyright not enforceable at the suit of the author of the protected work, or anyone who is fairly entitled to be called his successor in title. The Arts Council has argued most strongly — and I believe fairly and reasonably — that such a situation is properly to be regarded as incompatible with the main objects of the Berne convention.
In chapter 16.3 the White Paper says:
Variations from the simple, fundamental principle that the author owns copyright are justified only where convenience and natural justice clearly point in this direction.
It is very curious, therefore, that the White Paper proposes that the exception that I have been discussing should be retained. I hope that I have been able to persuade my hon. Friend the Minister that it creates considerable confusion and inconvenience, that it carries with it no significant practical benefit and that it embodies a palpable injustice. There is a wealth of reasons for the abolition of this subsection, and I hope that my hon. Friend will be able to tell us that it is no longer the Government's intention to re-enact it, or at least that he will look at it again very carefully.
So pleased was Hogarth with the introduction of the Copyright Act 1735 that he offered thanks to King and Parliament with a special engraving, in which the rays of royal favour emanating from the crown are shown falling upon mitres and coronets and upon Mr. Speaker's hat. The adoption of the reform that I have proposed would result in gratitude, possibly less spectacular but no less warm.

The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I thank my hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) for demonstrating that on this side of the House there is no shortage of affection for the artistic community in the United Kingdom and its products. I think that we are doubly blessed in this debate. My right hon. Friend the Secretary of State for Trade and Industry was, in a past incarnation, Minister with responsibility for the arts. The discussions that may take place after the raising of this issue will benefit from the close relationship between Sir William Rces-Mogg and my right hon. Friend.
The White Paper "Intellectual Property and Innovation" puts forward a number of proposals on the protection of various types of work under copyright law. As stated in this White Paper, the Government's broad aims are to ensure continued protection for those who create copyright works, while at the same time recognising that the public has a substantial interest in the availability of these works. I am pleased to say that the Government's proposals for copyright reform have, in general, been welcomed by both copyright owners and users.
We are dealing with those proposals which affect artists' copyright and I shall deal first with the changes that we propose to make. The most important change affects the so-called moral rights of artists, that is, those rights concerned with the reputation of the artist. Under our proposal, artists will be entitled to claim authorship in their works and also to object to any distortion of their works. This introduction of moral rights has been warmly welcomed by the artistic community and the Arts Council.
A further proposal will help artists who design sets of typeface characters for typewriters, computer printers,

printing presses and so on. At present, although individual typeface characters may attract protection. no protection for sets of such characters is available. The GoNernment will give the creators of original sets of type faces the right to control reproduction, importation and commercial distribution of copies. I know that my hon. Friend spoke about this proposal only obliquely, but I am sure that he will agree that this debate is the proper setting in which to clarify that small point about a specific constituency of the artistic community.
Those are the particular changes the Government are proposing. But what, of course, concerns my hon. Friend the Member for Stratford-on-Avon is a change that is not proposed. This is the matter of who should own the copyright in commissioned works. Under the current generality of copyright law, it is the artist who is normally entitled to any copyright subsisting in his work. This is spelt out in section 4(1) of the Copyright Act 1956. There are, however, three exceptions to this general rule. Two of these exceptions, in sections 4(2) and 4(4) of the 1956 Act, are about the ownership of works made by artists in the course of their employment.
Generally, it is the employer who owns the copyright in the absence of any agreement to the contrary. The third exception about which my hon. Friend has spoken generally, concerns certain works made in pursuance of a commission. The relevant provision is in Section 4(3) of the 1956 Act. This provides that where a person commissions a painted or drawn portrait, an engraving or a photograph, then that person and not the artist or photographer is entitled to the copyright in the work, unless there is an agreement to the contrary. These exceptions to the general rule of ownership were not new to the 1956 Act but were carried over from the previous Copyright Act of 1911.
The question of commissioned works was considered by the committee chaired by the Honourable Mr. Justice Whitford in its report on Copyright and Designs Law published in 1977. The committee, although not unanimous in the matter, recommended that copyright in all commissioned works should belong to the author in the absence of any agreement I.o the contrary. To protect the interests of the person who commissioned the work, the committee recommended:
that the person should have an exclusive licence for all purposes which could reasonably be said to have been within the contemplation of the parties at the time the work was commissioned.
In addition, the committee said that he should have the power to restrain exploitation of the work for any purpose to which he could reasonably object. These proposals were subject to much comment, but the clear consensus of opinion was that considerable practical difficulties would arise in determining what was within the contemplation of the parties at the relevant time.
In response to this criticism, the Government put forward an alternative proposal for public discussion in the 1981 Green Paper "Reform of the law relating to Copyright, Designs and Performers' Protection." This proposal had two aspects. First, the existing exception— giving the copyright to the commissioner — should be retained for painted and drawn portraits, engravings and photographs. For other commissioned works, the copyright should also belong to the person who commissioned the work and not the author. If, however, the commission was for a specific purpose, then the author


should have the right to prevent any use of the work for any other purpose. As explained in the White Paper, in the light of the comments received on this alternative proposal, the Government concluded that it was unnecessary and undesirable to amend either the basic ownership provision or the existing specific exemptions.
My hon. Friend the Member for Stratford-on-Avon objects to vesting copyright in anyone other than the artist. This objection is based on the view that it is an unwarranted departure from the basic rule of ownership of copyright. In written answers to questions by my hon. Friend on 16 June and to my hon. Friend the Member for Bolton, North-East (Mr. Thurnham) on 18 June, my hon. Friend the Minister for Information Technology referred to representations received from the Arts Council and the Royal Academy of Arts, and he undertook to look at the matter again in the light of those representations. As part of this exercise, I expect a meeting between my officials and representatives of the Arts Council and the Royal Academy to be arranged in the near future. Such a meeting has already been suggested by the chairman of the Arts Council. I also have a copy of our right hon. Friend's reply to Sir William Rees Mogg in which he rightly agrees to this exchange of views between officials.
I should however, like to make it clear that, in reconsidering this matter, we shall have to take into account the interests of those people who commission works as well as the interests of the artists who are represented by the Arts Council. The reason behind section 4(3) of the 1956 Act is that the artist or photographer ought not to be able to put the portrait, photograph or engraving to uses to which the commissioner may disapprove. This consideration would seem to apply as much today as it did when the provision was enacted in 1956 and 1911. It has to be borne in mind that while a professional artist or photographer might be expected to be aware of his rights under copyright law, it would not be reasonable to expect a person who commissions a protrait or photograph to have a detailed knowledge of the relevant statute. This suggests that the presumption, in the absence of an express agreement, would be in favour of the commissioner, not the artist. We would also need to be satisfied that the privacy of a person who commissions a portrait or photograph is not

unreasonably prejudiced as a result of a change in the law. Furthermore, it should be remembered that it is always open to an artist who wishes to own copyright in a portrait which he is commissioned to paint or draw to provide for this in an agreement with the person commissioning the portrait—then the commissioner would know exactly where he stands.
On a more legalistic note, it has been suggested that the provision. on ownership of commissioned works is out of step with the copyright law of most European countries and incompatible with the United Kingdom's obligations under article 2(6) of the Berne convention for the protection of literary and artistic works. On the first point, it has to be borne in mind that there are considerable differences between the copyright laws of European countries. The absence of an equivalent provision elsewhere should not stop us from doing what we decide is right for the United Kingdom. Such comparisons can also be misleading, since it may be necessary to take account of any laws relating to personal privacy or breach of trust and confidence, not just copyright law. On the second point, the Government's legal advice is that it is not correct to construe the Berne convention as overriding national legislation about ownership of property. The purpose of article 2(6) is to ensure that the protection provided for in the convention is enjoyed by authors where national legislation makes no relevant provision. If, therefore, a state chooses to legislate—as we do—to the effect that copyright should initially vest in one person rather than another, that does not constitute a breach of the convention.
As a result of the representations of my hon. Friend and others, we will re-examine the existing provision on the ownership of copyright in commissioned works. We will of course have to take fully into account the wishes of professional artists and the interests of those who commission works and who cannot be expected to have a detailed knowledge of their rights—or lack of rights— under copyright law.
With that undertaking, and with that recording of the agreement between the Secretary of State and the Arts Council to talk about the matter in some detail, I hope that my hon. Friend will be satisfied. He will be more than aware that, in this issue, the arguments are finely balanced.
Question put and agreed to.
Adjourned accordingly at six minutes to Twelve o'clock.